Feed Costs are Greatest Challenge for Turkey Industry

October 24, 2012
Washington, DC

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

 

Rick Sietsema, partner and chief financial officer 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.  

 

“Continued funding of EQIP is imperative for our industry’s ability to implement conservation practices.  On behalf of the industry, we are pleased that the 2008 Farm Bill kept 60 percent of the funds for animal agriculture and would hope those funds will be continued in the next Farm Bill,” Sietsema said.  Sietsema then described how his company utilized EQIP for the construction of several manure storage facilities. “In the near future our turkey litter will be delivered to our new state-of-the-art biomass gasification facility, closing the environmental loop and reducing our carbon footprint,” Sietsema said.

 

Before closing, Sietsema also mentioned that his company proactively works with USDA’s Natural Resources Conservation Service to ensure environmental stewardship.

 

Sietsema’s testimony is available here.

 

Photo available upon request.

 

About the National Turkey Federation
The National Turkey Federation (NTF) is the national advocate for all segments of the $14 billion turkey industry, providing services and conducting activities that increase demand for its members' products by protecting and enhancing their ability to profitably provide wholesome, high-quality, nutritious products.

 

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