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Bird Food Market Healthy

Tuesday, February 1, 2011
filed under: Utilization/Trade

Backyard bird feeders are busy places. Lots of birds means purchasing large quantities of bird feed to keep up with the feeding frenzy. Don’t they know there’s a recession?

Most hobbies or leisure activities take a hit during a recession when necessities take precedence. But bird feeding is one category that continues to buck the trend.

Why? Feeding wild birds in the backyard is an easy hobby to start and need not overtax the household budget. Due to the recession, people are spending more time at home and in their own backyards, and this could be one of the reasons why the wild bird food market continues to grow.

But it’s safe to say that the bird feeding market hasn’t entirely escaped the nation-wide financial crunch. Demand continues to grow—just more modestly than projected before the recession took hold.

Eric Juergens, senior marketing manager for KayTee Products, a Wisconsin-based bird food and small animal food packager, says while the industry hasn’t grown as much as projected before the recession, the market in general is very healthy.

Several factors can play a role in influencing the demand of the bird food market. A major one is price. As it goes up, demand will go down some. In certain areas of the country hit harder by the recession, there’s no denying that the economy influences peoples’ buying habits of non-essential items.

Other factors cited by Juergens include anomalies with the bird population, such as unexplained changes in migration patterns or varied eating habits by certain species. Yet another would be the weather. In some areas, an early spring can mean more natural food sources for birds and therefore less demand for backyard feeders. Conversely, in other areas a hard winter and late spring can mean more traffic at feeders.

“It’s a price-sensitive market,” Juergens explains. “As the price increases, the overall volume decreases slightly. Research finds that people are not necessarily discontinuing the habit; they are simply buying a few less bags than they normally would or cutting back just a bit.” We are a nation of bird lovers, and once people start to feed the birds in their garden they are unlikely to stop. According to the Wild Bird Feeding Industry (WBFI), each year more than 55 million Americans over the age of 16 feed wild birds or other wildlife around their homes, and spend more than $3.8 billion on bird seed, feeders and other accessories.

The most important element in attracting birds is the food offered. Sunflower seed is desirable to so many species because of its high oil content that provides energy for feather replacement, migration and survival in winter months.

Wayne Lindberg of Sunbird, Inc., in Huron, S.D., says the demand for bird food has been steady over the past few years. “It’s been a bird food winter so far this year,” Lindberg notes concerning the cold temperatures and significant snowfall amounts across the Northern Plains states.

Some who purchase wild bird food wonder why bird seed prices often fluctuate. The simple answer is: seed used for bird food is a commodity, and commodity prices fluctuate. For the most part, prices are a result of supply and demand, and you will find these forces in products of all types. If demand for bird food is steady, what happens if the supply goes down?

“Even though prices of bird food are up 60% from July, retailers haven’t really raised their prices all that much yet,” Lindberg states. “But, in the next quarter and into the next growing season, if supplies go down, retailers will start seeing a price effect and pass that along to the consumer — and that may be the test.”

Randy Brown of Harrold Grain Company in South Dakota also has seen prices on a steady climb over the past few months; but he isn’t sure it really has affected consumers’ buying habits so far. “The market still has good potential,” Brown observes. “It’s very territorial, in a sense. In some areas, the market is up — and down in others. It’s hard to predict. But it still remains a cheap form of entertainment that won’t be going away anytime soon.”

With sunflower acres predicted to be down in 2011, far less seed would be sold into the bird food market. Both Lindberg and Brown think the bird food market will suffer the consequences of a low supply by way of rising prices.

Brown says if the supply goes down as predicted, that could change the game in many ways. “The whole market complex has been very bullish this year. It’s going to be a very interesting 2011.”

Very interesting indeed as the competition for acres intensifies and prices trend steadily upward. Two strong influences have played an increasingly important role in pushing prices. One is the globalization of the marketplace, with events outside our borders heavily affecting pricing. Another trend is the high demand for commodities grown in the United States for export.

The failure of the wheat crop in Russia due to drought conditions this past summer, driving export volumes upward, was one of many international factors that sent commodity prices higher. Another influence — and possibly the most significant — is demand from China. Bird food may not be among the commodities China is buying from the United States, but the Asian country’s seemingly unending demand for other crops may result in growers planting less specialty crops — such as oil sunflower, which is used heavily in the bird food market. These factors have driven prices higher in all oilseed crops, so it’s unlikely the prices for bird food will drop or even stabilize in the near future.

Lindberg and Brown remain optimistic about acres, hoping that growers will be able to visualize the benefits of the rising prices. “If we’re still paying upwards of $25 as spring rolls in, farmers might be more interested in planting the black oilseeds for us,” Lindberg observes. — Sonia Mullally
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