Poultry industry experts discussed the recent past of the U.S. chicken segment and the challenges in its near future at the National Chicken Council‘s 58th Annual Conference industry outlook panel, "The Path Forward," held on October 11.
Poultry companies did very well in 2009 and 2010, leading to industry growth, according to panelist Michael Popowycz, vice chairman and CFO for Case Foods. But 2011 was a different story. "Bird weights went up and it caused many of the problems we had in 2011," said Popowycz. "The oversupply coming in from 2010 into 2011 caused sales prices to drop significantly. At the same time, corn prices in 2011 jumped about $2.50 a bushel. Soybean meal prices jumped about $50 a ton." These costs added roughly $0.08 per pound to live production costs in 2011. Sales prices dropped and live production costs rose in the summer of 2011. There were several bankruptcy filings, and several other companies were sold. "The industry had to create additional cash, and the only way to create cash is to cut your inventories," he said. Read More