119—Lancaster Faming. Saturday, May 12,1979
Delmarva’s broiler boost means corn ,
By Jerry Webb
Unireraity of Delaware
NEWARK, DEL.-Delmar
va’s broiler-corn-soybean
agricultural complex is
booming. The latest in
formation from Delmarva
Poultry Industry, Inc.,
(DPI) indicates that this in
terrelationship, which
already accounts for almost
three-fourths of Delaware’s
farm income and equally
sizable chunks of income for
those parts of Maryland and
Virginia on the peninsula, is
even stronger. The broiler
business is getting bigger
and that is affecting the
demand for corn and
soybeans.
DPI says 200 new broiler
houses were built in 78 and
each of them will produce
about 100,000 birds this year.
And according to DPI
president Simpson Dunahoo,
each of those houses will
need the production of about
100 acres of com and 115
acres of soybeans to feed the
additional broilers. That
figures out to some 20,000
corn acres and
soybean acres.
Obviously, area farmers
aren’t going to find that
many new acres, so it means
several things. Perhaps
some acres will be switched
from pasture and other less
intensive uses. Maybe some
farmers will switch from
vegetables to com and
soybeans if prices look good.
There are a few new acres
being cleared and' drained
and no doubt some of them
will be seeded to com and
soybeans. And there’s also
the opportunity for more
double-cropping of soybeans
behind small grains.
When it comes right down
to it, if Delmarva farmers
don’t meet the demand, the
needed feed ingredients will
be shipped in from
somewhere else. After all,
Delmarva’s feed grain
production is a drop in the
bucket when you look at the
' national picture. And the
prices Delmarva farmers
receive are based on mid
west prices with a tran
sportation adjustment ad
ded. So if local farmers can’t
supply the grain, it will come
from the Corn Belt of the
rapidly expanding southern
feed grain areas.
That transportation dif
ferential is a key factor in
local crop pricing. After all,
if a processor can meet his
needs with grain trucked to
his elevator, he can afford to
pay a little more than the
' Chicago price. Otherwise, he
would be paying the Chicago
price plus the transportation
from Chicago to Delmarva.
So the increased broiler
production is good for local
grain farmers because if
their expanding production
wasn’t needed on the
peninsula, they would be
selling to a midwest market
based on a Chicago price
minus the cost of tran
sportation from Delmarva to
the midwest.
All of this means that the
Delmarva broiler-com-soy
bean complex is important
and inseparable. ThehroHer
producers need the farmers
not only to produce their feed
grain but also to house and
care for their chickens. And
the farmers need the broiler
producers as a steady, ever
expanding buyer of their
crops.
Dunahoo points out that
the 200 new houses built in
78 were not just a one-time
thing. He expects a con
tinued construction trend of
200 to 300 new houses each
year for the immediate
future. He believes two
factors are working to
assure this trend. One is the
higher prices for red meat
which has increased the
demand for broilers.
Another is the investment
tax credit made available to
poultrymen for new house
construction.
I asked a broiler company
representative recently if
new broiler houses are being
built simply to replace old
outdated ones. He said
definitely not, that any old
house that is still usable has
broilers in it and the new
houses are virtually all
classed as additional
housing to take care of a
rapidly expanding broiler
demand.
Let’s face it, more people
are eating chicken these
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days. They do so primarily
because it’s a good nutritious
product that can be piepared
in a of taste
tempting ways. It’s also
cheaper than red meat.
Consumers are howling
over the rapid rise in beef
prices and they’re sub
stituting chicken whenever
they can. Of course, high
beef prices also cause higher
poultry prices as astute
marketers take advantage of
the supply situation. They
know the smart homemaker
will compare hamburger
with chicken and somewhere
along the line will decide
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soybeans
which is the better buy. If the
chicken price is favorable,
she will no doubt substitute
chicken for some of the red
meat intentions. Of course,
that puts pressure on the
poultry supply, boosting the
once upward to the point
where the homemaker is
again willing to pay a little
extra for hamburger.
And so around and around
it goes with the escalating
beef prices setting the pace
and poultry, pork and other
meats' following along.
Spiraling consumer incomes
are keeping the consumer’s
meat-buying habit high.
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Even though prices iV
much stronger than they
were a couple of years ago,
we’re still eating about as
much meat but we’re sub
stituting cheaper cuts of red
meat and we’re eating more
chicken. And that’s' why
Dunahoo and the DPI
organization feel that the
Delmarva poultry 'industry
will be expanding its broiler
production facilities over the
next few years.
It’s a good situation for the
broiler industry and for
those farmers who, are
dedicated to”expansion of
com and soybean output.
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