October 9, 2023

 

Affordability of US chicken takes a hit as industry players control poultry production

 

 

Chicken prices at US grocery stores have hit record highs as Tyson Foods, Pilgrim's Pride and other companies control poultry production to boost profits.

 

In addition, inflation-affected shoppers are buying chicken instead of beef and pork, meaning prices will likely remain elevated.

 

Data from the United States Department of Agriculture showed that chicken consumption is expected to exceed 100 pounds per person this year for the first time ever.

 

As prices surge due to dwindling cattle supplies, beef consumption is expected to drop to its lowest since 2018, while consumers have also cut spending on pork to the lowest level since 2015.

 

After earning massive profits when meat prices soared during the COVID-19 pandemic, Arkansas-based Tyson, which sells all three types of meat, had to deal with a surplus of chicken supplies.

 

The company announced the closure of six US chicken plants with nearly 4,700 employees in 2023 to reduce costs. However, tightening chicken supplies are now boosting producers' profits.

 

"They cut back. That seems to have buoyed the chicken market," said independent livestock market analyst Bob Brown. "To limit production and restore profitability," chicken companies sought to constrain the weights of birds this summer, Brown added, noting that lighter birds produce less meat for consumers.

 

In September, the US government reduced its estimate for 2023 chicken production from August, partly caused by expectations for lower chick placements, but production is still expected to be higher than in 2022.

 

Adam Speck, senior commodity analyst for Gro Intelligence, said further rises in chicken prices could threaten demand.

 

However, due to tighter beef supplies after ranchers reduced their herds during three years of drought in the US Great Plains, consumers are still mainly choosing to buy chicken.

 

Bill Densmore, senior director for Fitch Ratings, said: "We should see improving demand for chicken going forward. We will see retail beef prices remain high."

 

- Malaysia Sun