Feed Costs Seen as Greatest Challenge for Turkey Industry

A turkey industry representative told a Senate Committee yesterday that production costs are the greatest challenge currently facing the turkey industry.

Rick Sietsema, partner and CFO of Sietsema Farms in Allendale, Mich., told the Senate Committee on Agriculture, Nutrition and Forestry that the current run up in feed prices is due to short corn supply caused by the federal ethanol mandate and has created significant uncertainty on the turkey industry.

Feed accounts for 70 percent of the cost of raising a turkey, and corn is 70 percent of the feed ration. Corn and other feed prices have risen to new levels, corn going from $4 per bushel to more than $7 in barely a year.

Sietsema Farms is a member of Michigan Turkey Producers Coop. and raises a quarter of the 4.6 million turkeys produced and marketed both domestically and internationally by the co-op.

"The turkey industry is looking for reform of the existing ethanol policy, a safety net that ensures corn prices and availability will be less volatile in the future," Sietsema said.

Sietsema also told committee members that another challenge facing the industry is USDA's Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed marketing rule. The competitive injury provision in the proposed rule will make it easier to sue or bring regulatory action against livestock and poultry processors. Also of concern is the provision that requires processors to virtually guarantee growers they can recoup 80 percent of their capital investments. Sietsema went on to explain that studies have found that the proposed rule would have negative impact of more than $360 million annually in the turkey industry.

An area in which Sietsema commended the government's involvement and encouraged their continued support was in the Environmental Quality Incentives Program (EQIP). He praised chair Debbie Stabenow, D-Mich., and the committee for their leadership in securing EQIP funding.

Sietsema's testimony is available here [[http://saginawcounty.com/scripts/civil_events.pl?caseyear=10&casenum=009535]].