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Impact of Drought on the Chicken Meat Industry
Growing of chicken is less directly impacted by drought than other agricultural endeavours but water restrictions and increased grain prices do impact the chicken meat industry.  Grain is the major component of the feed used to raise meat chickens and its price represents a significant proportion of the industry's input costs.  Thus an increase in the grain prices, has a major impact on the industry's costs.  This is the topic of the October 2006 ACMF Media Release, written when 
wheat was being sold at 80% above the historic price. In September 2008, wheat prices had again increased due to a world shortage following bad seasons in Russia and elsewhere (the relevant media release can be read by clicking here).

It is of interest to observe that in a normal year, domestic sale of wheat represents about a quarter of total sales with the remainder being exported.  During drought, export sales are severely reduced and domestic sales become more prominent.  Almost half of all domestic sales of wheat are used in feed livestock, namely cattle, chickens and pigs.  The chicken meat industry in turn uses around 22% of the feedgrain wheat. The three graphs below illustrate the importance of feedgrains to the chicken meat industry.



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