Decline in chicken prices

The South African Poultry Association (SAPA) has reported a decline in the retail price of chicken despite high input costs and last year’s tariff increase on imported chicken.

Staff Reporter
January 24, 2014 12:31 pm

“The reality is that retail prices of frozen chicken have declined,” said Kevin Lovell, CEO of SAPA.

The lower price will put further pressure on poultry producers, many of which reported lower earnings last year.

“Individually quick frozen portions account for almost 65% of the total volume of chicken sold and our research shows that the prices of these products have not increased at all. This is borne out by the continued low and competitively priced retail chicken. In real terms, chicken prices have actually fallen.”

Lovell said statistics show chicken price inflation continues to lag behind the overall food inflation index, making chicken relatively cheaper over time. This will benefit the consumer “in a big way”.

According to Lovell, broiler producer prices have increased by less than 0,5% since 2008, meaning that poultry producers’ prices have declined in real terms over the past five years.

Looking ahead, Lovell said this situation may change as high maize prices, increased electricity costs, a weak exchange rate and escalating wages make their presence felt in the poultry producers supply chain.