Poultry’s impact on corn, soybean prices

BLOOMINGTON, Ill. — The poultry and egg domestic and export markets have a major impact on corn and soybean prices received on the farm.

Shelby Watson, USA Poultry and Egg Export Council’s internal operations manager, noted that strong connection on Illinois Corn TV, hosted by Haley Bickelhaupt, Illinois Corn Growers Association policy communications manager.

USAPEEC is a trade association representing about 95% of the industry with about 200 members comprised of traders, processors, producers and commodity groups.

“Our commodity groups, Illinois Corn Growers Association, Illinois Soybean Association, as well as Indiana Soybean Alliance, Indiana Corn Marketing Council and commodity groups from other Midwestern states are members of USAPEEC because they recognize the really important relationship that poultry and corn and soy share,” Watson said.

“We do whatever we can to increase exports of U.S. poultry around the world. That poultry can be chickens, turkeys, ducks, eggs and egg products. We represent a wide range and we do all kinds of different marketing programs to increase the amount of soybean and corn meal going out in poultry form.”

Q&A

If we didn’t have poultry and egg production in the United States, how would that impact grain farmers?

Watson: Without poultry and egg production, in general, U.S. corn prices would decrease by 46% and soybean prices would decrease by 68%.

Then, if you look at specifically for exports, U.S. soybean prices would decrease by 9% and corn prices would decrease by 6%.

So, there’s definitely an important relationship there, and without U.S. poultry in general, farmers would feel it, and there would be a lot of product left on the market.

What are one or more of USAPEEC’s greatest barriers regarding foreign trade and increasing exports?

Watson: Probably the one that is pretty consistent is protectionism over domestic markets. There’s a lot of poultry production around the world, and some of the governments in those countries want to protect their local production as much as possible.

So, they find little things they can throw up and say, nope, we’re not going to accept U.S. poultry because of this or that. It’s not necessarily a real rule that they’re following or sometimes they’re not following rules and agreements at all.

But we always try to go into a market with the understanding that we are truly there to help supply what their local production can’t produce themselves. So, we’re not going into markets trying to put any local producers out of business.

We use our relationship with corn and soybean partners to really drive that home because as local production and local demand increases, we all benefit because more people are eating poultry. They’re producing more and we can export more, so really everybody wins.

Where are some of the developing markets?

Watson: My No. 1 answer for this is always Africa. There is so much that can be done in the African market. There’s about three that we really have as strong markets, but there are so many that have those protectionist measures. We just need to have more conversations with those governments and really lay out how importing U.S. poultry can be a benefit to them.

So, there’s a lot to do with cold supply chain, a lot to do with just education in general about the qualities and safety of U.S. poultry.

What are the main African markets?

Watson: Angola is a really good market for us. We do a lot of programming in Ghana. Congo is a really interesting market for us. South Africa kind of goes up and down. They’re kind of like the problem child.

Sometimes, they’ll be a perfect trading partner and then sometimes there will be reasons why we can’t get into the market. South Africa is not as consistent, but still a good market for us.

What’s the background of how USAPEEC got started?

Watson: We started back in the 1980s. Georgia is the largest poultry-producing state. We had a lot of producers in the state who said they’ve got a lot of product and have the ability to increase production.

So, how can we increase production without just having a ton of chickens in the market that’s not being consumed? That’s really where we saw a need because domestic consumption is maxed out.

If we’re going to increase our chicken production, our turkey production, that product is going to have to go elsewhere because we Americans eat as much chicken as we possibly can for the year. So, that’s really where the need came from.

We started developing new markets to see where there was a need elsewhere in the world for product. That has kind of evolved into trade policy, as well. So, at the core, we’re a marketing organization. We’re increasing the awareness of U.S. poultry and trying to develop those markets.

We also serve as a resource on trade policy for our members, so that every single day, if they have an issue with product getting into a market, we’re there for them and we have the contacts and the knowledge to be able to get that product through.

I call them our firefights because they’re truly just waiting for the phone call of, “I have this load stuck at the border trying to get into South Africa. Can you help me?”

I don’t have if off the top of my head, but it’s a really impressive number of how much product we’ve been able to get into markets that otherwise would have either gone to waste, which is a really terrible thing, or it would have to be turned around and gone elsewhere. They’re still losing money either way.

We’ve really kind of transformed into that type of organization, as well.

By The Numbers

According to USDA’s Foreign Agricultural Service, poultry meat and product exports were valued at $5.49 billion in 2023 with a total volume of 4 million metric tons, led by Mexico’s $1.26 billion.

Exports to China ranked second at $732.75 million, followed by Canada’s $503.52 million and Taiwan’s $354.72 million. Other major customers are Cuba, Guatemala, Philippines, Vietnam, Angola and Hong Kong.

Exports for U.S. eggs and products in 2023 were valued at $760.89 million, led by Mexico’s $218.73 million in purchases and $200.5 million in sales to Canada. Other buyers of U.S. eggs and products include Japan, Jamaica, European Union, Brazil, Trinidad and Tobago, United Kingdom, Guyana and the Bahamas.

The National Corn Growers Association partnered with USAPEEC to commission a report in 2017 outlining the impact of poultry and products and the value it brings to the domestic corn market. The report specifically looks at boilers, eggs, turkeys and ducks.

According to the World Perspective Inc. report, U.S. poultry utilized more than 30% of all feed use of corn during 2016-2017.

WPI estimates that the 2016-2017 corn utilization for broiler, egg and turkey production was 1.663 billion bushels. Additionally, 3.58 million tons of DDGS were used.

At 17 pounds per bushel, this volume of DDGS is the equivalent of another 421.6 million bushels of corn. Combined, that is 2.084 billion bushels of feed use, representing the harvest from 11.953 million acres.

That acreage equivalent represents 14.3% of the total corn area harvested for grain, according to data from the USDA’s National Agricultural Statistical Service.

Total corn and DDGS use by poultry will increase by another 336 million bushels of corn and DDGS, to 2.42 billion bushels by 2027, according to WPI report projections.

At Home

In Illinois, the WPI report estimates broiler, turkey and egg exports in 2017 to 2027 will use 421 million bushels of corn and 680,381 tons of Illinois DDGS for a total of 501.5-million-bushel equivalent of Illinois corn and DDGS.

Indiana ranks first nationally in duck production, third in egg production and fourth in turkey production.

Boiler, turkey and egg exports from 2018 to 2027 will use 176.88 million bushels of Indiana corn, 456,635 tons of Indiana DDGS, for an equivalent of 230.61 million bushels of Indiana corn and DDGS, according to the WPI study.

In 2022, Indiana’s poultry and egg exports translated into 5.5 million corn bushels, which approximately 43.2% were turkey meat exports, 41.4% were for chicken and duck exports and 15.5% were for egg exports.

U.S. poultry consumes 60% of the soybean meal produced in the United States. Based on 2023 export numbers, about 6.6 million bushels of U.S. soybeans ended up going overseas in the form of poultry meat, according to the Soybean Research and Information Network.

According to the Indiana Soybean Alliance, 2.9 million soybean bushels from the Hoosier State were exported through chicken, turkey, duck and eggs, of which about 37% were for turkey meat exports, 46.1% were for chicken and duck exports and 16.7% were for egg exports in 2022.