November 25, 2010

Australia's chicken, egg prices rise on higher feed costs

Poultry, Australia's favourite meat, will be 3.5% more expensive in 2010/11, due to the effects of rising global grain prices, the National Australia Bank's (NAB) November rural commodities wrap predicts.

NAB agribusiness general manager Khan Horne said the price of feed grain was 16.6% higher than at this time last year and was unlikely to ease significantly until at least late 2011.

Feed costs accounted for about 60% of the total operating costs for chicken meat producers, he said.

"Over the near term, rising costs are likely to be absorbed by producers. However, as the situation continues and prices remain at elevated levels, it is a question of how quickly these costs can be passed on to consumers," he said.

The egg industry also is facing considerably higher costs this year, and NAB expects production to be down 2% in 2010-11 as a result.

The forecast is for a rise in consumer egg prices of around 4% and further rises in late 2011 when the full impact of rising costs should be felt.