Demand for Alternative Feed Grains for Broiler Production in an Era of Global Price Uncertainty: The Case of Sorghum

Global demand for chicken meat has grown more than fivefold since the 1960s, from 6.2 to 33.9 pounds per person today. The expansion of broiler production to meet this growing demand has also increased the need for feed. However, the demand for feed is complex, as these feedstuffs are also used for human consumption and biofuels, and broiler farmers tend to be risk averse for input prices. This study looks at how the increased demand for broiler feed may have affected the demand for feed alternatives among some of the world’s major broiler producing countries when faced with uncertain global feed prices and rising feed costs. The study examines these countries’ willingness to substitute sorghum for corn and what this substitution means for future sorghum exports from the United States. Results indicate a high substitution effect of sorghum for corn may have occurred over this period when price risk is considered. Whenever the price of sorghum fell sufficiently below that of corn and if corn prices were more volatile, risk-averse broiler producers shifted to sorghum. Countries that strongly showed this behavior are China, the United States, Egypt, and, to some degree, Mexico.