After a record breaking start

Wholesale skinless bone-in breast prices averaged about $3.50 per pound in May 2022, an all-time high, according to the USDA. Last month, the price had fallen to just over $1 per pound.

The high prices drove the collapse in demand as consumer switched to more affordable cuts and alternatives.

Producers were achieving record profits and now are showing losses, which is unsustainable. However, in the last quarter chicken production increased 3% and it is expected to increase a further 5% this quarter.

While Rabobank expect a decline in feed costs, concern over the spread of AI is still a factor.

Other parts of the world feel the pinch

In Europe, over the past few weeks poultry prices have fallen back from post covid lock down highs to below the 5 year average.

Astral Foods (SA’s biggest poultry producer) announced that “extraordinary high” feed input costs would tear into its profits in the six months to end-March 2023, sending its shares crashing as much as 18%, the biggest fall in the company’s history.

70% of poultry farms in Ghana are on verge of collapse, as poultry feed rose 300% in 2 years. The same situation applies in Egypt and Nigeria.

As news of confirmed cases of bird flu comes from various parts of India, prices of eggs and chicken have taken a free fall.

Conclusion

Poultry producers are faced with serious production costs and are no longer able to pass on these costs to consumers.

Read: Bird flu, feed shortages, poultry industries collapsing & inflation

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