According to a press release posted Tuesday on the official website of the National Chicken Council in Washington, D.C., the increase in the cost of corn, in tandem with other factors, has resulted in fewer birds produced overall.
“Chicken companies produced about one percent fewer birds last year, due in large part to record high corn and feed prices,” Bill Roenigk, chief economist and market analyst, was quoted as saying. “Corn makes up more than two-thirds of chicken feed and corn prices hit an all-time high in 2012, due to two reasons: last summer’s drought and pressure from a federal government requirement that mandates 40 percent of our corn crop be turned into in the form of ethanol.”
He added, “Simply put, less corn equals higher feed costs, which means fewer birds produced.”
Drought and increased input prices both serve to decrease the supply (shift the supply curve left). A decrease in supply decreases the equilibrium quantity and increases the equilibrium price--and potentially reduces your enjoyment of the Super Bowl.
Darn those ethanol mandates and global warming.