The chicken industry is under intense economic pressure from the rising cost of feedgrains, much of which is caused by the federal government’s ethanol program, Mike Welch, president and chief executive officer of Harrison Poultry in Bethlehem, Georgia told members of Congress this week. Welch testified before the Senate Committee on Agriculture, Nutrition, and Forestry in a hearing held this week on the “State of the Livestock Industry in America.”

“Broiler companies have tried to weather the storm of very high, very volatile corn prices,” Welch told the committee. “But now companies can no longer withstand the storm, he said,  and “are trimming their production plans, which means growers will receive fewer chicks to grow to market-ready broilers, and processing plant work shifts are being reduced or even eliminated.”

Welch said that the crisis is causing workers to be laid off, and he pointed out that one company was forced to declare bankruptcy and sell its assets to another company.  “Banks and other lending institutions are telling troubled companies ‘enough is enough,’ meaning selling your assets and repay your outstanding debt, Welch said.

The proposed GIPSA rule on  production and marketing of poultry and livestock and free trade agreements not yet completed have also put the industry under a cloud, Welch said.  The new GIPSA rules “would devastate our industry by imposing over one billion dollars in cost over the first five years, he said.  “The proposed rule should be withdrawn.”

The hearing consisted of two panels.  The first panel included four officials from USDA and the second panel included witnesses representing the turkey, beef, and pork industries, in addition to Mike Welch.

Ranking Member Pat Roberts (R-KS) said in his opening remarks that the U.S. livestock industry is “under regulatory attack” and blasted the proposed GIPSA rule as ignoring congressional intent and hamstringing an industry in already difficult economic times.  The proposed rule is a “trial lawyer’s full employment act,” he said.

The press release on Welch’s testimony can be found on NCC’s Web site, and the testimony can be downloaded from the U.S. Senate’s Web site

Meanwhile, National Chicken Council President Michael Brown will testify next week in front of the House Science, Space and Technology Committee Subcommittee on Energy and Environment on “Hitting the Ethanol Blend Wall: Examining the Science on E15.”  Rep. Andy Harris (R-MD), who  chairs the subcommittee, represents Maryland’s first district.

In addition, on July 27, the House Committee of Agriculture will hold a hearing on feed availability in the Livestock, Dairy, and Poultry subcommittee.  Representatives from the chicken, beef, pork, and turkey industries,  as well as American Feed Industry Association, will be testifying.