Israel government prevents egg shortage, agrees to price increase

Israel's government has prevented an egg shortage by agreeing to a 5.5 percent per-egg price increase, according to reports, raising the price for a carton of one dozen eggs to between NIS 11.76 (US$3.02) and NIS 14.06 (US$3.61), according to reports.
Prior to the increase, consumers paid NIS 11.10 (US$2.85) for medium-sized eggs, NIS 12.25 (US$3.14) for large eggs and NIS 13.40 (US$3.44) for extra large eggs. The Israel Poultry Breeders Association stopped providing eggs to local supermarkets on November 4, saying that high chicken feed pricing were making it too difficult for them to profit at current prices.
The price increase was authorized by Attorney-General Yehuda Weinstein, who was asked to rule on the decision by Finance Minister Yuval Steinitz and Agriculture Minister Orit Noked.

Israel poultry breeders refuse to deliver eggs until prices increase

The Israel Poultry Breeders Association has stopped delivering eggs to local supermarkets over a price dispute, and breeders have said that they will not supply the sector until the government increases egg prices by four agorot (US$0.01), according to reports.
The breeders are struggling to remain profitable in the wake of a 30 percent increase in chicken feed prices. If the price increase goes through, it will result in a 5 percent increase in costs for consumers. Both the finance minister and the agriculture minister must approve any change in egg prices.
“We have held off on the price increase for three months, and meanwhile we are absorbing the losses,” said Motti Elkabetz, head of the Poultry Breeders Association, who also said that the breeders delayed their protest out of consideration for the public. “We have no desire to become rich. We just want to live respectably. 3,000 families live off this industry, 2,000 on the confrontation line in the north. This is the only source of income for most of them, and without it their financial situation will become worse and worse.”

North Carolina livestock companies sign deals for corn imports

Family company of North Carolina hog producer Prestage Farms Inc., a subsidiary of Smithfield Foods Inc., and poultry company Nash Johnson & Son' Farms Inc. have signed deals to import 750,000 metric tons of corn from Brazil as a result of high feed prices in the U.S. due to the drought, according to Prestage Senior Vice President John Prestage.
The deals are the largest on record. "As it got drier and drier, we starting thinking, 'We'd better start looking around'," said Prestage. "So then we really went to work with the South American connections." The U.S. Department of Agriculture is estimating 1.9 million metric tons of corn imports from Brazil into the U.S. in the marketing year ending August 31, 2013.
According to Prestage, costs are roughly 5 percent cheaper to import corn from Brazil than to transport it from the Midwest.

Drought shrivels US poultry industry confidence

What does the current poultry industry have in common with the 1969 Chicago Cubs baseball team and golfer Greg Norman in the 1996 Masters Tournament? Like these famous collapses from front-runners, the perceived fortunes of the poultry industry have faded dramatically.

Confidence reversal

Just three months ago, I reported “confidence in the poultry sector has never been higher.” Now it’s near rock bottom:


• lowest Overall Index ever (44.7 based on 1996 baseline = 100)
• Lowest Future Profits Index ever (26.6)
• Historically low Opportunities and Conditions measures
• Lowest broiler and turkey Indices ever (35.7 and 43.6, respectively)


Poultry outlook wilted with drought

So, what happened? A severe drought has negatively impacted grain harvesting:


• Corn harvest is expected to be 13 percent less than a year ago, resulting in the lowest production since 2006 and the smallest surplus since 1996
• Soybean bushels are forecasted 14 percent below 2011 levels


Costs making poultry operations unprofitable
When coupled with rising energy costs – gasoline prices increased 27 cents per gallon during a single month – and the inability to pass on costs even though food prices were up 6 percent during July, poultry producers are forced into unprofitability.
Although some poultry producers have compensated with reduced production, third-quarter trends are nearly equal to a year ago (although year-to-date placements are down 3 percent).
Poultry retains edge in consumer value
The only bright spot for the foreseeable future is the widening value gap of poultry, relative to other protein sources. The competitive efficiencies of poultry have made chicken products more attractive to consumers than beef or pork.
Increased demand should help integrators weather this storm, but a return to long-term profitability will require significant changes in market conditions.

Greg Rennier, Ph.D., is president of Rennier Associates, Inc., email greg@rennierassociates.com.

WATT webinar to probe poultry and grains outlook for 2013

Join a webinar panel of three experts focusing on the economic outlook for poultry and grains in 2013, taking place on October 16 and hosted by WATT Publishing.

Register for this webinar.
The speakers for "Poultry and Grains Outlook for 2013" include Dr. Paul Aho, Poultry Perspective, poultry industry consultant and economist; Chip Flory, Farm Journal Media, editor of Pro-Farmer and expert on grain-farming trends; and Mike Helgeson, CEO of GNP Poultry. Gary Thornton, agribusiness content director for WATT Publishing, will moderate.
Areas of focus for the panelists will include their forecasts for U.S. grain and poultry prices in 2013, and:

• What is the profitability outlook for poultry producers in 2013?
• How will corn supplies be rationed among meat and poultry producers?
• What is the nutritional quality of the new corn and soybean crop?
• Have U.S. corn yields plateaued and what does this mean for future supplies?
• How high will wholesale and retail meat and poultry prices go in 2013?
Plus, pose your questions to the panelists, live via the Internet, in a question-and-answer following their presentations. Registration is available online until the event begins at 10 a.m. EDT/9 a.m. CDT on October 16.

Trinidad & Tobago poultry, livestock feed prices expected to rise

Trinidad & Tobago's poultry and livestock feed prices are expected to rise in response to the U.S. drought — local feed producers said they saw corn and soybean prices increase 20 percent in their last shipment, and expect that number to go up another 33 percent in the next shipment, according to reports.
The nation must import nearly 100 percent of its raw feed ingredients. "The grain market over the last year has been very volatile, but not so drastic that we couldn't manage costs," said Geoffrey Rostant of Master Mix Trinidad. "Now, the way these prices are going up, it will not be possible to sustain." Rostant said that supply is even more of an issue than price, and that producers are looking to non-traditional sources like South America for alternatives.
Meat prices will go up, as well, leading to further concerns. "If people see high meat prices they just won't buy," said President of the Sheep and Goat Farmers Association Shiraz Khan. "We can hope that imported meat prices go up, then we could possibly raise ours as well (to remain competitive)." Khan said the government should do more for farmers to help them access affordable feed prices. "We need the state to step in so we can find some viable alternative supply," he said.

India poultry feed prices up 69 percent in 2012

India's poultry feed prices have increased by 69 percent so far in 2012 due to lack of rainfall and higher global rates, according to reports, making it likely that chicken and egg prices will also increase throughout the year.
The 69 percent year-on-year rise in July is up from the 18 percent increase in June, said research firm Nomura. The numbers are also outpacing those set during the country's 2009 drought. Cereal prices could rise, as well, according to Nomura, if farmers choose to find substitutes for poultry feed as a way to control costs.

Tyson stops using wheat in poultry feed

Tyson Foods Inc. has stopped using wheat in its poultry feed due to prices rising above those for corn, according to reports, ending a practice that began in 2011 when wheat prices fell below those of corn for the first time in 15 years.
The change in current practice, which other companies are also headed towards, could put a strain on U.S. corn supplies, which are set to drop to their lowest level in 16 years during the summer, say analysts. "If the price spread between wheat and corn narrows some more, we may work it back into our feed ingredient formula," said Tyson spokesman Gary Mickelson. The U.S. Department of Agriculture has projected feed and residual use of U.S. wheat for the 2012–2013 marketing year that began June 1 at 230 million bushels, a 50 million-bushel rise from 2011–2012 and the highest level in four years.

India poultry feed prices drop slightly in Haryana

Poultry feed prices in the Indian state of Haryana have dropped as ingredient prices have held steady, according to reports, with 30-kilogram and 50-kilogram bags falling by Rs 10–20 (US$0.18–$0.36) on June 12.
Prices of almost all feed ingredients have been unchanged since June 1, said Subhash Sharma, financial head of Sarvottam Poultry Feed Centre Pvt. Ltd. Maize is at Rs 1,170 (US$20.98) per quintal, bajra is at Rs 1,080 (US$19.36) per quintal and fish oil is quoting at Rs 68 (US$1.22) per liter.
Prices of broiler concentrates feed and broiler starter mash have gone down by Rs 20 each and are currently quoting at Rs 1,560 (US$27.97) and Rs 1,240 (US$22.23) for a 50-kilogram bag, respectively. Broiler pre-starter concentrate 30 percent decreased by Rs 20 and is selling at Rs 1,370 (US$24.56) for a 30-kilogram bag, while layer concentrate has decreased by Rs 10 and is running at Rs 1,200 (US$21.51) for a 50-kilogram bag. Prices of pre-lay mash have eased by Rs 15 (US$0.27) and currently sit at Rs 800 (US$14.34), while broiler finisher is selling at Rs 1,220 (US$21.87) for a 50-kilogram bag, down Rs 20 from previous levels, according to reports.

Nepal chicken, feed prices up on lowered poultry counts

Nepal's poultry producers have raised their prices by Rs 15 (US$0.18) to Rs 150 (US$2.64) per kg due to the depleting population of chickens on their farms, according to reports.
A shortage of fuel has made it more difficult to maintain poultry sheds at hospitable temperatures, say farmers, which has led to a necessary reduction in their stocks. There is currently a supply deficit in Nepal's capital of 15%–20%, said Naran Hari Khattri, president of Feed Industries Association Nepal. Daily demand is around 200,000 kg of chicken, but Khattri said the onset of Nepal's wedding season will only increase the deficit. A significant rise in feed ingredient costs has also precipitated a rise in chicken feed prices, to Rs 45 (US$0.55) per kg from Rs 30 (US$0.37) per kg. “We are compelled to increase the feed price as major components of feeds are imported with payments made in the U.S. dollar, which has strengthened lately,” said Khattri. Maize and oil cake have increased to Rs 25 (US$0.31) and Rs 35 (US$0.43) per kg from Rs 19 (US$0.23) and Rs 30 (US$0.37) per kg, respectively.

India broiler prices rising on short supplies

India's live broiler prices have reached Rs 53 (US$1.08) per kilogram, up from last week's Rs 47 (US$0.96) per kilogram, on short supplies after experiencing a lull due to seasonal uncertainties, according to reports.
Prices of layers and eggs have remained steady at Rs 40 (US$0.81) per kilogram and Rs 2.61 (US$0.05) each, respectively. “Broiler prices declined [in September] because of the austere/festive season resulting in poor offtake," said an industry source. "Most of the poultry farms were running in half their capacity; and due to shortage of birds, prices are likely to go up gradually.” Poultry feed prices have remained stable, at Rs 19,600 (US$398.86) per metric ton.

Kenya poultry sales drop, production costs rise

Kenya farmers are reducing orders for day-old chicks as poultry production costs rise, impacting hatcheries and overall poultry farming in the industry, according to reports.Kenya-based Kenchic Limited has seen its day-old chick sales decrease by 50%, according to a company spokesperson. Investors overall are cutting back, leading to a reduced supply of chicken and eggs in the Sh 5 billion (US$55.5 million) industry.
The price of maize went up in February, March and June, bring the production cost per chicken from Sh 180 (US$2.00) to Sh 250 (US$2.78). The Kenyan government is currently allowing the importation of cheaper maize to try to offset price increases and revitalize the industry.

Taiwan co-funds poultry feed donation to Libya farmers

The Taiwan International Cooperation and Development Fund has partnered with Mercy Corps to procure 125 tons of poultry feed for Libyan farmers, according to reports.
The $95,000 move was intended to stabilize Libya's poultry industry, which is suffering from a disrupted supply chain and expensive feed prices. Libyan farmers unable to afford feed have had to kill or sell their breeding stock, according to the ICDF. "If the problem continues, there will be no breeder chickens left in Libya," said Ma Wei-chung, an ICDF officer. "Should this happen, it will take at least 19 months to repair the supply chain and get chicken back on the market."
The feed supplies will last for approximately one month. In the meantime, more sustainable solutions are being researched.

Ghana poultry farmers call for government help to save business

Poultry farmers in Ghana's Brong-Ahafo region have asked the government to provide corn at lower prices to prevent their businesses from collapsing.
According to Nana Asamoah Sebreku, chairman of the Dormaa Poultry Farmers Association, the poultry industry is a major source of employment for the area. The situation, he said, has triggered panic buying among consumers.
In mid-May, Ghana's poultry industry called for the government to provide a buffer stock of yellow corn to help combat rising feed prices.

Nigeria poultry industry calls for 'state of emergency' declaration

A significant rise in animal feed ingredient prices, particularly corn and soy, has Nigeria's poultry industry calling for the government to declare a state of emergency in the country's agriculture sector.
According to Dr. Femi Faniyi, state chairman of the Poultry Association of Nigeria, Ogun State Chapter, diesel has gone up 25%, groundnut cake 40%, soybean 55% and maize 36%. “It is important that food must be made available cheaply," said Faniyi. "But the biggest challenge we are having is that prices of feed materials keep going up and thus affecting the price of egg." The prices of eggs and poultry are rising to combat costs, but according to the industry the prices are growing beyond consumers' abilities to pay.
The association said that the government should give input subsidies to farmers and guarantee prices of the commodities. Policies that favor poultry farmers and regulations that will stabilize prices on the consumer end are also necessities, according to the industry.

Bangladesh plans poultry industry tax break extension

Bangladesh's National Board of Revenue is considering further tax breaks for the country's poultry sector that may run until 2025, according to reports.
The current tax holiday is set to end in 2013, but poultry association president Syed Abu Siddique said that 30% of the industry has been affected by bird flu and requires an extension to recoup losses. The industry is also calling for a withdrawal of the existing 5% tax on imported poultry feed.

Pilgrim's Pride reports $120.8 million loss due to animal feed costs, storms

Pilgrim's Pride reported a first-quarter loss of $120.8 million due to high animal feed and fuel costs, winter storms and inventory reductions, according to the company.
The loss is a significant increase from the first quarter of 2010, when the company reported a loss of $45.5 million. Pilgrim's said it has implemented efforts to reduce costs by $400 million, due in part to a predicted $500-million increase in poultry feed costs for 2011. "We will continue to look at further price increases," said CEO Bill Lovette.
Damage from recent storms in the U.S. Southeast will temporarily reduce chicken production, causing further troubles, said Pilgrim's. Roughly 100 of the company's 16,400 chicken houses were damaged or destroyed, and power was knocked out to two processing plants.