Material Insights · Understanding the Material World

Maize and Poultry

Feed is the largest cost of raising chickens and maize is most of the feed, so maize prices set poultry margins; in India poultry takes the largest share of maize, now competing with ethanol plants.

Maize (commodity) and Poultry (commodity): 3 relationships.

How they are linked

1. Main feed grain

Physical flow · Strong · Maize to poultry

Broiler feed is built on maize for energy and soybean meal for protein, and feed is the largest variable cost of rearing birds.

  • about 70% feed share of variable cost for Indian poultry producers
  • about 65 to 70% maize share of feed cost
  • 44% share of India's maize used as poultry feed, about 2025

These shares mean a 10% rise in maize prices raises variable cost by roughly 4 to 5% (0.7 times about two thirds).

Sources: ICRA; Rural Voice

2. Price link: feed cost

Cost and price · Weak · Both ways

Feed costs push chicken prices up over time, but chicken prices also swing with disease outbreaks and demand, so the measured link is weak.

  • 0.24 monthly change correlation
  • 0.28 12-month change correlation
  • 0.07 fitted elasticity

The monthly correlation rose to 0.32 in the last five years, when feed prices swung widely. Integrators absorb part of the shock in margins, which is why ICRA expected earnings volatility to persist in 2023.

Sources: Material Insights (World Bank, FRED, IMF data); ICRA

3. Ethanol competition

Physical flow · Rising · Ethanol demand competes with feed for maize

India's ethanol blending push turned maize into a fuel feedstock, adding a buyer that competes with feed mills for the same grain.

  • about 12.5 Mt maize used for ethanol in India, 2024-25
  • 20 to 25 Mt expected ethanol maize use by 2030-31
  • about 32% rise in Indian maize prices, 9M FY2023 year on year

Maize supplied almost 50% of ethanol feedstock in 2024-25. A FICCI and YES Bank report projects total demand rising from about 50 Mt in 2025-26 to nearly 72 Mt by 2030-31, so feed buyers face a structurally tighter market unless yields and area grow.

Sources: ICRA; Rural Voice

For investors

Key learnings

  1. Maize prices are the main swing factor in poultry margins, since feed is about 70% of variable cost and maize most of the feed.
  2. Indian ethanol demand is a new structural buyer of maize, so poultry feed costs now depend on fuel policy.
  3. The price link to chicken is weak in the short run, so poultry producers carry the feed shock in margins before passing it on.

What to track

  • Indian maize spot prices (e.g. Davangere, Nizamabad): Feed cost pressure on integrators (Weekly · Agmarknet and NCDEX)
  • Broiler farm-gate prices: Ability to pass feed costs through (Daily · state poultry federations)
  • Ethanol maize procurement volumes: Competition for feed grain (Each ethanol supply year tender · oil marketing companies and Ministry of Petroleum)

For policymakers

Key learnings

  1. Ethanol targets and poultry feed demand draw on the same maize, so blending policy should be set with feed supply in mind.
  2. Raising maize yields and area is the main lever to supply both feed and fuel without imports.
  3. Maize price spikes pass to chicken and egg prices, a cheap protein for many households.

What to track

  • Maize production and stocks: Whether supply covers feed and ethanol demand (Seasonal · Ministry of Agriculture)
  • Share of maize going to ethanol: Pressure on feed availability (Yearly · industry and ministry data)

India

Poultry feed takes about 44% of India's maize, while ethanol plants used about 12.5 Mt in 2024-25 and may need 20 to 25 Mt by 2030-31.

Sources

  1. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  2. Indian poultry industry: earnings volatility to persist, ICRA (2023)
  3. India's maize demand to surge 44% by 2030-31 as feed and ethanol sectors drive agri-economy: FICCI-YES Bank report, Rural Voice (2025)