Food security

Real chicken prices have actually come down

Almost every week brings new warnings of food price rises to come in 2022, based on international factors, sharp increases in fuel, fertilizer and feed input costs, and floods or drought.

However, as the latest issue of the South African poultry industry’s Poultry Bulletin points out, poultry producers are actually earning less per chicken now in real terms – that is, after discounting for inflation – than in 2017.

The effect of inflation on producer incomes is based on the SA Poultry Association’s latest key market signals for the broiler industry, covering the third quarter of 2021.

The nominal producer price for broilers has gone up from R21.44/kg in 2017 to R25.27/kg in the year to September 2021. However, the real price, discounting for inflation, has gone down from R19.69/kg in 2017 to R19.40/kg over the same period. 

Producer prices in 2020 (R19.19/kg) increased by 2.8% from 2019; but in real terms decreased by 2.2%. 

The report also details the significant mark-ups between producer and retail level.

For instance, producers received an average of R29.60/kg for whole fresh chicken in the third quarter of last year, while consumers paid an average of R58.89/kg in retail shops.

Average third-quarter markups from producer to retailer were 99% for whole fresh chicken, 124% for fresh chicken portions, 59.2% for individually quick-frozen (IQF) portions and 100% for frozen portions not IQF. 

Comparing chicken to other meats such as pork and beef, the report shows that broiler meat and eggs remain the most affordable of all protein sources.