How many ways can you cook chicken? Next year you just might find out.
The drought that wreaked havoc on corn crops in the United States this year will have a continuing impact well into 2013 and beyond. Since the corn shortage meant higher feed costs, farmers cut back on the number of animals they raised this year in order to protect their bottom lines.
But with poultry, there's a biological advantage says Corinne Alexander, associate professor of agricultural economics at Purdue University. Since it takes a mere eight weeks to grow a chicken to market weight, compared to a year for pork and about three years for beef, the poultry market will be the first to recover from the events of 2012.
Thomas Super of the National Chicken Council says there will be an ample supply of chicken in supermarkets compared with other choices. Pork lovers won’t see prices moderate until mid-late 2014 and beef lovers will wait longer still – 2016, says Alexander. But that doesn’t mean chicken will come cheap. “We won’t see lower chicken prices until the next corn harvest in the fall of 2013,” says Alexander.
John Davie, president and CEO of Consolidated Concepts, a buying service company for restaurant chains, cautions that the growing demand for chicken could temper bargains next year. “Higher demand for chicken could persist if the prices of beef, pork and other meat items are historically strong.”
In addition, not all chicken parts are created equal: The bargains will be in chicken breasts. “Despite lower slaughter numbers, birds continue to be bred for more breast meat. Breast prices in 2012 will average about 8 percent above a year ago, but still well below 2010 levels,” says John Barone, president of Market Vision, a provider of customized market analysis for restaurant chains. “Conversely, wings and leg quarters will again be historically high.”
Fewer cows equal higher beef prices, and hog production is becoming more corporate and concentrated, says Barone. “High feed prices forced a lot of smaller producers out of business, but the big guys remain intact. Pork prices (except for bellies/bacon) were depressed in 2012, and will recover back to 2011 levels in 2013. If – and I repeat, if – we get a good corn crop in 2013, pork prices could be lower again by 2014.”
He agrees with Alexander that beef won’t recover any time soon. “Cow numbers are so low it will take the industry years to recover. There’s not much chance of relief before 2016.”
Adds Davie of Consolidated Concepts, “We have found our [restaurant] members are paying between 3 and 10 percent more on their contracts for beef products next year, depending on the cut. In some cases, we have seen proposals for increases over 20 percent from 2012.”