The U.S. government has announced that it will buy a $40 million “bonus” purchase of chicken, on top of the chicken it normally buys for feeding programs, including soup kitchens and school lunches. The $40 million buy, combined with a similar $44 million chicken purchase last year, gives producers an extra $86 million in government chicken purchases above the roughly $100 million the USDA buys in scheduled chicken purchases for a year, reports theWall Street Journal.

There is a glut in the chicken market now after producers pushed production levels higher and demand remained flat, said Bill Roenigk, senior vice president and chief economist for National Chicken Council. USDA reports show that the inventoriy of chicken in June was 13.1 percent higher than last year, while prices for chicken breasts and wings are down more than 20 percent from last year.

The chicken purchase announced Monday, USDA Secretary Tom Vilsack said, will "provide support to the broiler industry and the many small independent poultry growers that depend on the industry for their livelihood. Broiler producers have already cut production substantially and this purchase will help them bring supply in line with demand."

Source: Wall Street Journal