Council Helps Colombian Poultry Industry Members Better Understand Global Corn Prices

When commodity prices rise and an industry is worried by uncontrollable outside forces, it often looks to experts to help assess where the global market is before making important buying decisions.

That’s exactly what happened recently in Colombia.

On Mar. 2, the U.S. Grains Council conducted a virtual presentation for the members of the National Federation of Poultry Producers of Colombia (FENAVI) covering the world corn supply and demand situation to help poultry producers understand the dynamics behind current corn prices so they can make informed decisions when buying the most relevant ingredient in what they feed their poultry.

Nearly 120 Colombian poultry producers attended the webinar moderated by FENAVI’s Head of Economics with presentations by Council Manager of Global Trade Reece Cannady, a feed grains industry expert and a local speaker who discussed managing higher grain prices in poultry operations.

“FENAVI reached out to the Council in February asking for support in setting up a webinar that could give Colombian poultry producers an idea of what to expect in terms of corn prices during 2021,” said Ana Ballesteros, USGC marketing director in Latin America. “FENAVI wanted to make sure poultry producers had all the information they needed to make solid decisions related to investing in additional chicken placements.”

In 2020, Colombia’s poultry sector grew 1.8 percent, but it was largely due to a 14 percent growth in the egg subsector. The country’s broiler sector actually decreased by 4.7 percent.

“The COVID-19 restrictions and its economic effects heavily hit one of the most relevant chicken distribution channels – restaurants and hotels – and while some outside consumption was substituted by in-home cooking, the unemployment rate growth also meant that consumers didn’t have the same purchasing power as before the pandemic. Some had to switch to a cheaper protein or even to no protein at all,” Ballesteros said. “This explains why the average Colombian’s eggs consumption went from 291 eggs in 2019 to 325 in 2020; but it also explains why the broiler sector decreased.”

In a country that is the third-largest customer for U.S. corn and the sixth-largest grains in all forms (GIAF) market in 2019/2020, the poultry sector is responsible for nearly two-thirds of corn demand in the country.

U.S. corn exports to Colombia were up 3 percent year-over-year to roughly 4.91 million metric tons (193 million bushels) in 2019/2020, making Colombia the third-largest customer for U.S. corn. Representing nearly 11 percent of all U.S. corn exports, Colombian corn purchases were the second-highest volume on record. Colombia was the sixth-largest GIAF market in 2019/20 with sales of 6.36 million metric tons (250 million bushels), valued at $1.32 billion.

“The Council has been a long-time ally of FENAVI and has supported projects that contribute to the poultry sector’s modernization and growth,” Ballesteros said. “FENAVI wants to make sure its members survive a year that will still be difficult due to persistent movement restrictions brought about by COVID and a slow economic recovery explained by the government’s limited resources and an expected slow vaccination process. It is in our interest to support this sector’s performance to protect feed grains and co-products demand in one of the U.S.’s Top 5 corn export destinations.”

A side benefit to the Council’s participation in the event: The president of the Dominican Republic’s poultry association was also invited to sit in on the virtual seminar and afterwards invited the Council to assist on a similar event with his association members in the near future.

“In these times, when end-users of corn are concerned about high prices of feed ingredients, they look to the Council to get an expert opinion on what to expect,” Ballesteros said. “I think that shows how end-users of grains and their industry associations trust us.”

Read more about the Council’s work in Colombia.