"The biggest challenge is securing feed ingredients at a reasonable cost," said Janet Snow, chief nutritionist at Devenish Nutrition USA, at the recent Poultry Industry Education Trust conference in Northern Ireland. "That’s one of our largest challenges in the poultry industry today. Next is making a profit."
Floods and droughts in key corn production areas in the USA have seriously damaged the 2011 harvest, compounding already high prices caused by a small rollover of crop from 2010.
"Flooding in the Missouri River Valley has pretty much wiped out production in the border areas," Dr Snow said. "Not only this, we’ve got a second weather event – drought – in southern Iowa, northern Missouri, parts of southern Indiana, Illinois and some parts of Texas."
The poor harvest in the USA is set to put more pressure on soya bean and wheat prices as the high price of corn leads soya bean producers to switch crops.
Latest estimates from the US Department of Agriculture put the average corn yield at 148 bushels per acre (1.6t/ha) – 3% down on August’s estimate and the lowest for six years. The stocks-to-use ratio is 5.3% compared with the 15% historic average, suggesting high prices well into 2012.
Dr Snow added that, despite the extreme price movements of inputs, prices paid for meat had not increased to compensate and this could lead to a "disaster".
"I was talking to a nutritionist at one of the largest broiler producers in the USA and he said it was costing them $1.50 to produce a pound of breastmeat and they were selling it for a dollar."
Consequently, the number of eggs being set by broiler producers has reduced by approximately 6%, while arable farmers are increasingly turning to enzymes and pre- and probiotics, as well as dried distillers grains and biotechnology to grow hardier crops.