Although I think the production of Ethanol from corn is stupid, a few observations:
1) This is good news for American Corn Farmers (or should be.)
2) Pilgrim's Pride's cost for feed has gone up exactly as much as it has for other poultry producers such as Tyson. If the market won't support higher poultry prices to compensate for the higher feed costs, then there is an oversupply in the market, and Pilgrim's Pride closing a plant is a natural response to market condtions.
3) I'd like to know how much processed feed went up in comparison to how much a bushel of corn went up. Here's the Corn Flake example of cost of corn vs. final product costs.
The corn flakes example:
An 18-ounce box of corn flakes contains 12.9 ounces of milled field corn.
When field corn is priced at $2.28 per bushel, the 20-year average, the actual value of corn in the box is about 3.3 cents. At $3.40 per bushel, the average price in 2007, the value was about 4.9 cents. The 49 percent increase in corn prices would be expected to increase the price of the box of corn flakes by about 1.6 cents, or 0.5 percent.
(Source: USDA)
You can buy an 18 ounce box of corn flakes today for about $3.65.
If the corn in that box is valued at 4.9 cents, the farmgate value of the corn in that box is 1.4 percent of the cost at the store's checkout!
I have to believe the cost of feed is a small portion of the cost of packaged poultry at the supermarket. All of the poultry dressing and processing is very labor intensive and has higher costs involved.