US corn, soymeal feed woes deepen as millions of chickens face cull

Millions of chickens in the northeast of the US face slaughter in the coming days due to a shortage of staff at meat processing plants as a result of the Covid-19 pandemic.

According to the Delmarva Poultry Industry, at least one company is “depopulating” 2 million chickens as a result of the staff shortage, with significant knock-on effects on animal feed demand.

“With reduced staffing, many plants are not able to harvest chickens at the pace they planned for when placing those chicks in chicken houses several weeks ago, before any Coivd-19 quarantine and social distancing measures took effect,” Holly Porter, executive director of the association said in a letter to members.

“In some cases, this leads to more birds waiting on chicken farms to be harvested than plants have capacity to harvest and process. If no action were taken, the birds would outgrow the capacity of the chicken house to hold them,” Porter said.

She added that one company is culling 2 million birds on several farms on the Delmarva peninsular – a near 200-mile strip of land occupied by Delaware and parts of Maryland and Virginia.

However, market sources suggest the problem of oversupply of livestock may be more widespread after the world’s largest pork-producing company – Smithfield – on Sunday said it was indefinitely closing one of the biggest pork production plants in the US.

“I cover the protein space and broiler producers are breaking eggs at the fastest pace I’ve ever seen. Some processed egg product producers will likely start killing hens. I think about 10% of pork packing capacity will be down for at least two more weeks,” said one analyst.

Soymeal prices at export ports have slumped more than 13% in the past three weeks to $323/mt CIF US Gulf, according to Agricensus data, while corn prices have fallen a more modest 7%.