Higher feed cost pushes up broiler chicken prices

Broiler chicken meat prices have witnessed a sharp rise in the last couple of months because of higher feed cost and robust demand.

According to the Poultry Federation of India (PFI), the rise in poultry feed prices has led to an increase in cost of production, which has pushed up farm gate prices across the country.

Additional costs like air-coolers and higher electricity consumption, along with labour costs, also inflate the cost of production of broiler birds in the summer months, when demand remains robust.

Trade sources told FE that wholesale prices of live broiler birds are currently ruling at Rs 138-140 a kg across key producing states, up from around Rs 120 a kg a year ago.

For the retail consumer, the chicken prices are ruling at Rs 240 to Rs 250 a kg, against Rs 210-220 a kg prevailing a year back. According to industry estimates, 650 grams of meat is derived after culling a 1-kg live broiler bird.

“Cost of production has increased by 20-25% this year,” Ricky Thaper, treasurer, PFI, said.

Thaper said that poultry feed cost, which accounts for around 65% of the cost of production for broiler birds, has increased to Rs 47,000 a tonne from Rs 42,000 a tonne a year ago.

Poultry feed constitutes about 60% grains (maize, broken rice, bajra or wheat), 35% soyabean, groundnut or sunflower meals, and around 5% vitamin premix and calcium.

In the last couple of months, there has been a 25-30% increase in feed cost as maize rates have increased from Rs 20,000 per tonne to Rs 25,000 per tonne, and soyabean meal rates have increased from Rs 55,000 per tonne to Rs 68,000 per tonne.

According to an official with the Telangana-Andhra Pradesh broiler coordination committee, because of the onset of summer, transportation of broiler birds has become quite expensive, and mortalities in transit are high. “While demand for poultry meat is robust, transportation of birds becomes challenging, leading to higher mortalities and lower supplies, thus pushing up prices,” an official said.

Because of the spike in prices, inflation in chicken prices rose by more than 20.74% in March 2022, while the overall food inflation in the meat and fish category was 9.63%. However, fish and prawn price inflation witnessed a moderate increase of 3%.

As per the Department of Animal Husbandry and Dairying, more than 80% of India’s poultry meat is produced by organised commercial farms and the rest is produced by backyard poultry, mostly in rural areas. Of the commercial broiler production, major poultry companies that follow vertically-integrated operations have a share of 60-70%.

India’s poultry meat production was estimated at 4.44 million tonne (mt) in 2020-21, as against 4.34 mt achieved in the previous fiscal. Maharashtra, Haryana, West Bengal, Tamil Nadu, Andhra Pradesh and Telangana contribute more than 80% of the country’s poultry meat production.