LOW domestic supply has pushed the farm-gate price of broilers to reach a historic-high of P130 per kilogram, something that the United Broiler Raisers Association (Ubra) said is another cause for concern of faster inflation in the coming months.
Latest Ubra price survey as of February 5 showed the average price of off-sized broilers now at P120 per kg; while regular-sized ones are quoted at an average of P124.67 per kg.
The group’s latest survey also showed that the average farm-gate price of prime-sized broilers is now at P125.06 per kg.
The average prices for all three sizes of broiler are about P5 per kg higher compared to the farm-gate prices observed last January 29, based on Ubra data.
Ubra President Elias Jose Inciong told the BusinessMirror that the increase in farm-gate prices reflects the all-time high prices of day-old chicks (DOCs) that have breached the P50 per chick level today.
The spike in DOCs is a reflection of the reduction in breeders, as raisers adjusted to the anemic demand for chicken meat last year due to government-induced lockdowns against Covid-19.
“DOCs are now at P52 per chick. It was just P14 per chick last September and P28 per chick last October,” Inciong said in a phone call. “Indeed this situation is really a cause for concern for higher meat prices.”
Inciong described the government’s price ceiling on chicken meat—P160 per kg— as “not realistic” due to rising input prices that include not only DOCs but also feeds.
Inciong warned that broiler raisers may opt to reduce or stop restocking in the coming weeks due to the price ceiling, which is hard for them to comply with.
He explained that the break-even cost now for broiler raisers ranges from P92 to P100 per kg, up from the usual P70 to P78 per kg.
“Why will you restock? If you restock today and harvest next month you are still covered by the 60-day price ceiling. You cannot do anything with the selling price especially if input costs continue to increase,” he said.
Inciong said they have repeatedly told the government about the eventual tightness in chicken meat supply as early as May 2020.
He pointed out that it was a “natural market reaction” for raisers and breeders to cut their production due to low demand last year.
He said most members of Ubra have been unable to fill the capacity of their farms due to lack of DOCs.
“We have warned Agriculture Secretary William Dar back in May and again in June that once the breeders voluntarily culled their stocks, it would result in a big problem and it would be hard to resolve,” Inciong said.
Inciong warned that the farm-gate prices of broilers would continue to rise once farms stop their next cycle of loading which results in tighter domestic supply.
The Philippine Chamber of Agriculture and Food Inc. (Pcafi) earlier said inflation would accelerate in the coming months as the government is ill-prepared to deal with the country’s food supply problems. (Related story: https://businessmirror.com.ph/2021/02/08/food-supply-woes-to-put-pressure-on-inflation/)
Read full article on BusinessMirror