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Agribiz: Feeling effects of supply and demand from drought

POSTED: August 1, 2012 11:30 p.m.

With record drought in the Midwest driving up feed prices, consumers can expect to pay more for their poultry.

Those higher feed prices are hitting farmers in Georgia, where the drought and severe heat are taking a different type of toll. The state’s poultry industry has mostly escaped harm because of controlled-climate housing, but little farmers are feeling ill effects.

“It’s kind of put production off,” said Morgan Corley, who owns Corley Corral farm in Bolingbroke with his wife, Sandy. “A lot of the hens are not laying.”

Corley was selling the eggs from his free-range hens for $5 a dozen at Wednesday’s Market on Mulberry in Macon.

The farm has 75 hens, which normally produce about 55 or 60 eggs each day. They’re now making about 20 a day.

The U.S. Department of Agriculture predicted last week that the poor crop yields from the record drought in parts of the country will help push food prices, including poultry and eggs, up by 3 percent to 4 percent next year. Poultry prices are likely to rise first because of the short time needed for “broilers,” or chickens raised for eating, to grow to maturity.

Georgia is the nation’s leading poultry-producing state. Drought affects meat and poultry prices the most because feed is the biggest production cost.

“The price of corn is at historically high levels,” said Mike Giles, president of the Georgia Poultry Federation. “That hasn’t completely played out yet. We really depend on the Midwest for our corn. Georgia’s corn production isn’t enough to satisfy it.”

Demand from foreign countries and the ethanol industry has contributed to the short supply, Giles said.

“Ethanol is a new buyer in the market that’s become larger than poultry, pork and livestock combined.”

Giles said technology has helped the industry avoid the heat-related losses of the past.

“The impact on poultry in terms of heat and drought is much different than it used to be years ago,” he said.

“When you had severe drought, you had significant losses. You don’t see those dramatic impacts.”

Almost two-thirds of the country is experiencing drought conditions, but nowhere might be worse than Georgia, which is well on its way to a third straight year of inadequate rainfall. On a tour of several South Georgia farms last week, U.S. Department of Agriculture Deputy Secretary Kathleen Merrigan told the Albany Herald that “Georgia is the toughest place in the country right now.”

Friday, a group of livestock and poultry producers from Georgia, Nebraska and Minnesota said they plan to ask next week for drought relief. Because of the widespread drought, corn prices are spiking and analysts are predicting a U.S. corn shortage, the group said in a news release.

“Another short corn crop would be devastating to the animal agriculture industry, food manufacturers, food service providers and consumers,” said the producers, who represent top national poultry, beef, pork and turkey associations.

Help with the corn shortage would “save thousands of jobs across many U.S. industries and keep food affordable for American families,” they said.

Michael Wheeler is county extension coordinator for the UGA Cooperative Extension in Hall County. You can contact him at 770-535-8293, www.hallcounty.org/extension. His column appears biweekly on Thursday’s Business page and at gainesvilletimes.com


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