June 14, 2006

Chicken prices on the way up in the US thanks to exports

US chicken prices are finally on the way up after months in the doldrums as higher exports lowered supplies.

John Kontoravdis, general manager of Northwoods Hearty Home Cookin, said in the past three weeks wholesale chicken prices climbed 10 percent to 15 percent.

Last year, US chicken exports grew 10 percent to 2.1 million tonnes from 1.9 million tonnes in 2004, according to the USDA. However, chicken prices fell in the end of 2005 and in early 2006 when fears of bird flu lowered demand for poultry in many EU countries.

16 percent of the US chicken production is typically exported, said Richard Lobb, spokesman for the National Poultry Association. The majority of the exports are dark meat, chicken legs and thighs.

In 2005, exports fell at the end of the year when bird flu outbreaks occurred in December and exports went down 30 percent, he said. Now, the market is returning to normalcy, Lobb said.

However, increased production of beef and pork is still keeping prices down, he said.

Chicken cannot be expensive if beef is cheap so their prices would play off one another, Lobb said, adding that the free market results in unpredictable conditions. 

Carl Lindsey, meat director for Stack & Van Til supermarkets, said wholesale chicken prices began to show increases within the last few weeks.

However, chicken is a supermarket loss leader, deliberately priced low to bring people into the store, Lindsey said, adding that deals are not always reflective of the market price.