... And Now The Meat Producers Are Going Down

chickens chicks

Photo: Wikimedia Commons

The next shoe is dropping in the drought crisis.Higher corn prices are crushing the companies that make chicken, eggs, and other meats.

Big time poultry player Sanderson Farms fell 5% just today.

From MarketWatch:

Over the past month, shares of chicken producer Pilgrim’s Pride (US:PPC) have tumbled 24%, while rival Sanderson Farms (US:SAFM) is down 20%. Tyson (US:TSN), which also sells beef and pork, is off 11% over the same period.

Corn shortages aside, higher prices are a margin killer.

From Bloomberg:

With forecasters including AccuWeather Inc. predicting worsening conditions in the next month, corn traded in Chicago surged by $2.6525 a bushel since mid-June, or 52 per cent. The rally is adding to pressure on the livestock industry because cattle feedlots are already losing as much as $200 an animal. Sanderson Farms Inc. (SAFM), the third-largest U.S. poultry producer, said every 10-cent corn increase boosts costs by $2.21 million.

Click here to see pictures of the devastation of one farm in Missouri >

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