First electricity rates jumped, now gasoline prices are galloping up, and the next sticker shock could be chicken prices, which are likely to go up at least 10 percent by the summer.
That?s what James Perdue, chairman of the East Coast?s largest poultry company, told members of the Maryland Economic Development Association on Tuesday morning.
The culprit is the rising price of corn, which is the main source of chicken feed. More than a third of all corn is going to produce ethanol, a fuel added to or used instead of gasoline.
“We?ve got to feed those chickens,” Perdue said.
He noted that TysonFoods, the nation?s largest poultry firm, announced in April a second-quarter loss. Because Perdue Farms is privately held, the company doesn?t report its finances, he said. “It?s very difficult to make money” in this environment. “You?ve got to raise prices.”
The three-state Delmarva Peninsula ? the center of the East?s chicken industry ? already had higher prices than operations in the South and Midwest, and was facing other challenges, including the loss of 1,000 independent chicken farmers since 1995.
Corn is the basis of 40 percent of the food in the United States, Perdue pointed out, raising prices on other commodities, such as sweeteners.
“The losers in this are going to be the consumers,” Perdue said. “I have no idea how people on fixed incomes are going to pay for food.”
Perdue told The Examiner that prices for chickens “are going to have to go up 10 percent,” but he couldn?t estimate how much higher they might go.
“Tell me what the price of corn is going to be,” he said. “We?re in new territory.”
Perdue also described his company?s efforts to help the industry become more environmentally friendly, by reducing water usage and by processing 75,000 tons of chicken litter into organic fertilizer that the firm is selling to Scott?s and more than 100 golf courses.
