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Corn prices; where do we go from here?

//24 Jul 2007

Author: Mojtaba Yegani

Dr Paul Aho recently gave an interesting talk on the possible consequences of increasing use of corn for ethanol production in USA on the poultry industry all around the world. He mentioned that "a central argument for the move to ethanol is based on the desire to be less dependent on imported oil, and eventually, on oil in general.
During the recent Poultry Science Association annual meeting in San Antonio, Texas (July 2007), there was an interesting talk by Dr Paul Aho on the possible consequences of increasing use of corn for ethanol production in USA on the poultry industry all around the world.
He mentioned that "a central argument for the move to ethanol is based on the desire to be less dependent on imported oil, and eventually, on oil in general. Ethanol does make us less dependent on imported oil. That reduced dependence, however, comes at a cost. Feed grain prices are significantly higher.".
Expansion of the US ethanol sector has significant effects on the agricultural sector. The corn market is affected directly by the increase in ethanol production (from corn). Corn used to produce ethanol rises rapidly over the next several years.
I.   Do you think that high corn prices can act as a strong stimulus for importing countries to increase their domestic production of corn?
II.  Do you think that inclusion of distillers grains (by product of ethanol production from corn) into poultry diets can become a common practice? What are the possible limitations?
III. How do you see short- and long-term effects of this policy on your poultry industry including total cost of production and consumers' access to poultry meat and eggs as cheap and healthy sources of protein?
Let's share our opinions/experiences here.
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Comments (6)

1.
The impact of Global warming is a much more serious threat than the increase in cost of corn. Although corn prices have increased by a staggering 52% in the past 12 months & eventually imposed a huge increment on the direct cost of poultry production, I expect that prices will level up in the coming 3 years, as many domestic producers will increase their production. I do not favor the inclusion of DDG in poultry feed, I would prefer to include sorghum as a better source of protein thus reducing the dependence on corn. From my personal point of view, DDG will be a short term solution until corn production increases again. In concluding, a recent study was done in the US,showed that the average weekly expenditure of an american family on main house goods like milk, eggs & meat has increased by 33% due to related increase in corn prices. Nevertheless, it is a short term effect & poultry meat & eggs will remain a cheap source of Protein.
Rayan A. Haydar at 25-07-2007 15:37
2.
That is the tip of the iceberg.What will be the impact on soybean production?.What about biofuel from vegetable oil. What about the land taken out of production for biofuels. What about the poor people who have insufficient land for food and arable land is used for something far less necessary in a hungry world? Motives are purely selfish.
David Farrell at 26-07-2007 00:36
3.
We in Egypt have seen a large and unexpected increase in the price of corn and consequently in the price of poultry meat and eggs due to the increase of feed price. I completely agree with the opinion of my best friend Prof. Dr. David Farrell, the most famous Australian Poultry Nutritionist, the policy of ethanol production of corn is depends on the US national needs for oil, however, international needs of corn and its effects on meat and egg production to meet the animal protein needs of a hungry world should be reviewed with large scope. I think, they will be more work to obtain the best replacement of corn in poultry diets, low tannin sorghum grain, barley, wheat, rice bran/polishing and DDG may be alternative sources, a new combination of carbohydrate feed ingredients should be investigated to mimic the amount of corn in poultry diets. Also, increasing local production of corn may be an alternative tool. DDG may be used partially, but in the range of 10-20% based on type of birds.
Prof. Youssef Attia, Egypt at 28-07-2007 11:16
4.
we are not master in production of all segments. us ethanol sector also help to poultry industry to how to soleve the corn problem,they should also have search other grains for bio-fuel."where ever industry will we dont bother
about others" its not correct corn prices hike is directly effect to esenssiol food products like eggs,meat,milk.kindly think big.thank you.
pavan kumar j at 30-07-2007 17:16
5.
That is the way to cultivet the disert in countery which have larage land to cultivet corn like sudan &egypt
Esam Nasr at 31-07-2007 04:02
6.
Cultivate corn in country like Egypt needs a lot of water and investment and the primary goal is production of foods for human consumption and import the grains for animals feeds when possible due to urgent needs of water for crops like rice in summer and wheat in winter and the larger investment needs. Due to limited amount of water supply for Egypt, we should consider, however, that in Sudan and many other Nile valley country corn and low tannin sorghum can be cultivated and solve a lot of problems. Although, good and effective agreements should be established. All in all the problem of carbohydrate source could be solved and feed price will take time until constant, however, new basis for feed formulations are needed to limit the amount of corn in animal feeds.
Prof. Youssef Attia, Egypt at 31-07-2007 19:26

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