Georgia poultry farmers are suffering from a spike in feed costs due to the Midwestern drought, but federal officials are stepping in to help.
USDA officials say they’ll purchase $50 million worth of chicken, which they’ll pass on to food banks.
“Anything that takes product off the open market increases the price for product that is remaining on the shelves,” says UGA agricultural economist Jack Houston. Less poultry means more income for farmers and higher prices for consumers.
But, Houston says, this kind of intervention doesn’t just stabilize income for farmers; it actually stabilizes the food supply by incentivizing farmers to keep growing chickens, instead of drawing down production until feed costs go back to normal.
And then there are the social benefits of passing the government-purchased product on to the needy.
“If you have to have government intervention, this is kind of a win-win, because of the state of people who are unemployed and depending on the food banks," Houston says. "They would not be buying this product anyway. Taking it off the market allows the remainder to be sold to those who will.”
Houston says the government’s actions will only help farmers temporarily. According to an estimate by UGA poultry scientist Mike Lacy, Georgia farmers stand to pay almost half a billion dollars extra for feed this year.
Georgia is the nation’s number one poultry producer.