NCC pleased with corn, concerned about soy
The National Chicken Council was glad to hear that acreage planted in corn this year will increase 15% over 2006, but apprehensive about a predicted drop in soybean acres.
Bill Roenigk, senior vice president and chief economist of the National Chicken Council
(NCC), said that while the Council is encouraged by the USDA Prospective Plantings report
, the outlook is clouded since the poultry industry is a major buyer of soybean meal as well as corn. The chicken ration typically consists of 70% corn and 20% soybean meal.
Inspired by the fuel ethanol boom, US farmers intend to plant the largest amount of land to corn in 63 yearsâ€”90.454 million acres (36.6 million hectares). Soybean plantings are projected at 67.140 million acres (27.2 million hectare), the smallest area since 1996.
“The weather is going to drive it all,” said Tom Buis, president of the National Farmers Union
, pointing to the uncertainties of the growing season. USDA figures are based on a survey of 86,000 growers during the first two weeks of March.
The cost of producing a chicken has gone up 40% since last summer due to the runup in corn prices. Only a modest rise in food prices was seen in 2006, but with high corn prices increasing feed costs, beef and poultry price increases should begin to accelerate this year.
The NCC has estimated that a total of 21 million new acres of corn will be needed in 2007 and 2008. The ethanol industry has 114 plants in operation, and 80 under construction, nearly all of which run exclusively on corn.
â€œIf 12 million new acres are planted this year, that leaves nine million needed for next year,â€ Roenigk said. â€œAt some point, we are going to run out of land and the ability to shift more acreage from soybeans and cotton into corn.â€