Corn Prices Causing Uncertainty and Volatility

US - One of the highlights of the recent 2011 Poultry Processor Workshop highlighted the uncertainty and volatility caused by the current high maize prices.
calendar icon 23 May 2011
clock icon 4 minute read

"In 2006, corn was $2.56 a bushel. In 2009, corn had reached a 'new normal' at $4.00 a bushel. In March 2011, corn was over $7.00 a bushel. This has added about seven-and-a-half cents per live pound production cost," remarked Mike Donohue, Vice President for Agri Stats, Inc. He presented at the 2011 Poultry Processor Workshop, sponsored by US Poultry & Egg Association's Poultry & Egg Institute.

Mr Donohue went on to discuss that the future's market is indicating corn will still be over $7 through the end of 2011 and into 2012. In addition, the cost of soybean meal is up, with the 'new norm' at $380 per ton – adding another nickel a pound in live cost. He remarked that with 68 per cent of live cost coming into the plant as feed and grain expenses, plants have to be good in all areas of production. He also provided insight into other industry challenges, such as dealing with regional challenges in finding labor, issues with water consumption and water treatment, continuing emphasis on improving plant efficiencies, and yield.

Mr Donohue concluded his presentation by remarking: "Work on efficiencies, maximize yields, and we will work through this."

Another session featured an Immigration/Managing ICE Enforcement Actions presentation by Mark Reed, CEO of Border Management Strategies. He discussed the current Administration's focus on wanting employers in handcuffs and not workers. Mr Reed remarked that it took hundreds of agents working hundreds of hours to conduct the ICE raids of 2008. The focus for 2009–2011 has changed to the employer, with the government going after management. According to Mr Reed, ICE is fining companies for non-compliant I-9s, and this has become a source of revenue for ICE.

Mr Reed commented: "Spend time and money to make sure I-9s are correct and technically compliant." He also remarked that companies would be well-served to produce a document on hiring policies if they are targeted for inspection by ICE.

Tom Wisvari, Plant Manager for Cooper Farms, provided a case study in gas stunning of turkeys. Mr Wisvari discussed Cooper Farms' process of stunning its turkeys on transport trucks. With the help of Praxair, the company has implemented a gas-stunning system that helped achieve its objectives, some of which are reducing physical stress on employees, eliminating live shackling of turkeys, increasing meat yields and labour savings.

Other sessions included topics such as 'Energy Efficiency in the Processing Plant', 'Employee Retention and Development', 'Legal Challenges and Policies with Social Media', 'SIP-2011: An Industry Perspective', 'FSIS Update', 'Animal Welfare: A Worldly Perspective', 'New Processing Technology', 'Stunning Methods Comparison' and an 'Exports Update'.

Tom Wisvari (Plant Manager, Cooper Farms) and Dr Jeff Buhr (USDA-ARS) at the 2011 USPoultry Poultry Processor Workshop
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