← Business Metric: Industry Specific (Industrials & Materials) (all topics)
Spread - poultry (broiler realisation less feed)
What it is
Poultry economics turn on the gap between broiler or egg realisation and feed cost, where maize and soybean meal are the dominant inputs. Both the output price and the feed price move independently, so the spread swings violently
Ethanol diversion has structurally raised maize costs
Impact on industries
- The classic hog-cycle pattern - high prices attract placements, oversupply follows, prices collapse, and the correction takes a full breeding cycle
- Maize diversion to ethanol has raised feed costs structurally, so the cost floor has risen independently of poultry demand
- Avian disease outbreaks can close markets and destroy flocks with no operational defence available
- Vertical integration into genetics, feed and processing smooths the cycle, and branded poultry, QSR demand and egg exports move pricing off the daily broiler market