Feeding Chickens Is So Costly It’s Changing Global Trade Flows
· Some feed makers in U.S., China turn to wheat to cut costs
· Perdue bought Brazilian soybeans, BRF turned to Argentine corn
By Isis Almeida, Michael Hirtzer, and Kim Chipman, Bloomberg
April 29, 2021
Feeding the world’s chickens, pigs and cows has gotten so expensive it’s upending global trade flows.
As grain prices surge, American chicken giant Perdue Farms Inc. took the rare step of buying soybeans, an American staple, from rival Brazil. BRF SA, Brazil’s top poultry producer, turned to neighboring Argentina for corn, while feed makers in China and the U.S. are buying wheat more commonly used for bread.
These tactics and others by the world’s top food companies highlight how tight the global market has become. A gauge of grain prices is at an eight-year high, boosting the cost of feeding animals and signaling higher meat prices could be coming for consumers. Still, keeping up with rising meat demand as the world recovers from the pandemic has industry executives saying the rally is far from over.
“The meat and chicken industries still have good margins, so higher prices are yet to curb their appetite,” said Brian Williams, a senior vice president at Macquarie Group Ltd. in New York. “However, corn prices have risen enough that in some parts of the U.S. wheat is being dialed in.”
It may all seems simple, but changing the diet of animals comes with some risk:
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