Buying a whole chicken at the supermarket or ordering a bucket of wings at your local fast food eatery may soon cost more than just a few months ago, and all due to the devastating drought that has wiped out one-sixth of the country's corn crop in the Midwest.
Corn makes up 70 per cent of chicken feed.
Since the beginning of June, price on corn has gone up 40 per cent, forcing poultry producers to spend more money on each chicken they grow.
‘We have no choice but to pass it on to the consumer,’ Ron Joyce, a high-end chicken farmer from North Carolina, told
. ‘We have to raise out prices or not produce the birds.’
Costly livestock: Poultry farmers have been spending 40 per cent more to feed each chicken they grow
The U.S. Department of Agriculture estimates that prices at the grocery store will jump next year by 4-5 per cent for beef, 3.5-4.5 per cent for chicken and turkey and 3.5- 4.5 per cent for dairy products, including milk, cheese and eggs.
The poultry giant Purdue is now considering cutting the amount of corn in its feed to 55 per cent, which could result in underfed, low-weight animals.
North Carolina, the nation’s second biggest poultry producer, has long been considered a bellwether for the livestock farming industry.
‘As goes North Carolina livestock production meat prices, so go national meat prices,’ said Kelly Zering, an associate professor and extension specialist at North Carolina State University.
Seeking alternatives: Corn makes up 70 per cent of chicken feed, but now poultry producers are considering partially substituting the pricey commodity
More than 65 per cent of North Carolina’s agricultural income comes from livestock, and local growers import more than two-thirds of the corn, wheat and soybeans they use to feed their animals, according to the
News & Observer.
While feed prices have been on the rise for the past decade, this year they have reached an unprecedented benchmark of $8-$9 for a bushel of corn.
While feed prices have gone up threefold or more, the price farmers get for meat has not even doubled, forcing some growers to cull their herds or get in debt to stay in business.
But North Carolina is not the only poultry-producing state whose corn crops have taken a serious hit this year, sending prices through the roof.
Skyrocketing cost: This year, corn prices have reached $8-$9 for a bushel, up from $3 or $4
Nearly 80 per cent of Georgia is under conditions that are at least abnormally dry, according to the National Drought Mitigation Center’s U.S. Drought Monitor cited by the
Henry Daily Herald
The most recent drought report revealed more than 24 per cent of the state is experiencing exceptional drought conditions - the highest measure of drought reported by the center.
As a result, Mary Kathryn Yearta, public affairs director with the Georgia Department of Agriculture, confirmed to the Herlad that that poultry prices could begin rising in the fall by as much as 3 per cent.
Devastating drought: Aleast 1,369 counties across 31 states declared disaster areas by the U.S. Department of Agriculture
The hottest July in U.S. history has caused irreparable damage to crops, forcing corn farmers to abandon fields greater in area than Belgium and Luxembourg.
At least 1,369 counties across 31 states declared disaster areas by the U.S. Department of Agriculture.
Soybeans, which are used for animal feed and to make vegetable oil, have also been affected, with this harvest likely to be the worst for five years.
The crisis has prompted the US Department of Agriculture (USDA) to forecast record-breaking price rises, and some of the world's largest food manufacturers, including Kraft, Tyson and Nestle, have already indicated that they will pass on the increase to consumers.
Damaged: The worst drought for half a century in the U.S. has destroyed one-sixth of the country's expected corn crop
USDA now expects 10.8billion bushels of corn to be produced this year - 2.2billion bushels less than the projection it made last month.
USDA chief economist Joseph Glauber told the Financial Times: 'We're going to see very high prices.'
The problem could have far-reaching consequences internationally.
In 2007-08, high food costs led to riots in more than 30 countries, but Jose Graziano da Silva, the director general of the UN's Food and Agriculture Organization, said the current crisis was not as severe.
'We do not have the demand pressure from China and India as five years ago.'
Poor corn: The US Department of Agriculture has significantly reduced its forecasts for crop harvests
The situation has worsened since the week ending July 29, when USDA found that 48 per cent of the nation's corn crop was either poor or very poor.
The department said 47 per cent of the soybean crop was in very poor or poor condition.
They were the worst ratings since the drought of 1988, which cut production by 20 per cent and cost the economy tens of billions of dollars.
With grazing pastures also parched and feed prices at record highs, many ranchers are sending their animals to slaughter early because it is too costly to keep them until full size.
Help for farmers: The US Agriculture Department has unveiled new help for frustrated, cash-strapped farmers and crop insurers have agreed to provide farmers with a 30 day grace period on premiums
Crisis: Disaster areas have been declared in 31 U.S. states after the worst drought for decades
President Barack Obama's administration has opened up protected US land to help farmers and ranchers and has encouraged crop insurance companies to forgo charging interest.
It has also provided emergency low-interest loans to farmers in 31 states, where disaster areas have been declared due to the drought.
Source: Argentine Beef Packers S.A.
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