Ethanol Boom Forces Closure of US Poultry Plant
Maple Leaf Farms has blamed the rocketing price of corn for its decision to shut down its duck plant in Wisconsin with the loss of up to 200 jobs and slammed the US Government ethanol policy as “misguided”.
The cost of feeding the ducks on high-priced corn now outweighs the market price of the birds, a Maple Leaf spokesman was reported as saying.
The price of corn has soared because of the ethanol boom with farmers able to yield greater profits selling their grain to ethanol producers who are willing to pay higher prices. In CBOT corn this week, the benchmark May contract rose the maximum 20 cents allowed in a session to settle at $5.44-3/4 per bushel.
Rade Dimitrijevic, of Maple Leaf, said: “We've had to offset low demand with a price increase in an attempt to stabilize. That wasn't able to do it. We've tried to manage our way through this.
“But what forced the company's hand the most was not the cost of labour but rather the cost of corn.”
Sources quoted Maple Leaf Co-President Scott Tucker as saying the company had struggled to make the decision but in the end it had no choice.
"Unfortunately, we have analyzed the situation, and the only way we can cope with skyrocketing feed costs brought on by the government's misguided ethanol policies is to cut our own production and consolidate some of our operations,” he said.
Mr Tucker added: "Feed ingredients represent nearly half of our annual operating costs. In the last year, every single feed ingredient we use has gone up in price, and many have doubled or tripled,".
The cost of feeding the ducks on high-priced corn now outweighs the market price of the birds, a Maple Leaf spokesman was reported as saying.
The price of corn has soared because of the ethanol boom with farmers able to yield greater profits selling their grain to ethanol producers who are willing to pay higher prices. In CBOT corn this week, the benchmark May contract rose the maximum 20 cents allowed in a session to settle at $5.44-3/4 per bushel.
Rade Dimitrijevic, of Maple Leaf, said: “We've had to offset low demand with a price increase in an attempt to stabilize. That wasn't able to do it. We've tried to manage our way through this.
“But what forced the company's hand the most was not the cost of labour but rather the cost of corn.”
Sources quoted Maple Leaf Co-President Scott Tucker as saying the company had struggled to make the decision but in the end it had no choice.
"Unfortunately, we have analyzed the situation, and the only way we can cope with skyrocketing feed costs brought on by the government's misguided ethanol policies is to cut our own production and consolidate some of our operations,” he said.
Mr Tucker added: "Feed ingredients represent nearly half of our annual operating costs. In the last year, every single feed ingredient we use has gone up in price, and many have doubled or tripled,".