October 15, 2010
Jamaica Broilers to increase chicken price
Jamaica Broilers has signalled that chicken meat prices are about to soar by as much as 10%, as the cost of grain continues to rise in the US.
"We anticipate increases over the next two months of a low of 5% to a high of 10%," said Ian Parsard, vice-president of finance and energy at Jamaica Broilers, the main suppliers of chicken meat.
Parsard said yesterday that in the very likely event of grain prices continuing its rise, there might be more than one price increase over the next two months.
US grain prices had reached record high prices, Parsard said, noting that this had triggered a significant increase in the price of animal feed.
He noted, however, that Jamaica Broilers would be examining strategies to minimise the impact on consumers as much as possible, saying, "We will have to review the situation at the end of two months."
Jamaicans consume an estimated 220 million pounds of chicken meat per year.
The Observer was unable to reach Caribbean Broilers, the other major player in the poultry industry for comment, but Parsard said "all players who have to buy grains are facing the same challenge".
He suggested that there were three main reasons for the increased prices for corn and soya, including a drought which had hit Russia, one of the largest exporters of grain. This had caused a suspension of wheat exports to other countries, thereby pushing up the demand for corn soya and other grains in the US.
The US, on the other hand, did not produce the yield it initially forecasted, resulting in reduced supplies.
The third factor, Parsard said, was the weakening of the US dollar which has caused some things like oil, gold and grains to increase in value.
"All three factors put together have resulted in corn prices moving up to 50% from July of this year and soya prices increasing up to 25%. Given that the cost of feed make up 30%-40% of the cost of poultry production, it is anticipated that this will affect the cost of chicken meat," Parsard added.
According to Jamaica Broilers, local feed prices could move as much as 35%. This would ultimately impact the cost of broiler meats, eggs, pork, milk and other products which use feed as an input.
Parsard said Jamaica had less than four weeks' supply of feed at any given time, hence it was highly unlikely that anything would change before the supply ran out.
As for alternative markets, Parsard said there was none, as buying feed from South America was not an option, given the logistical challenges in getting it here. According to him, there was a huge pile-up of ships waiting in line at some ports in Brazil.
Meanwhile, Parsard assured consumers that despite damage caused to the industry by the recent flood rains, there would be no shortage of chicken meat this Christmas.