Even as Canada’s chicken industry enjoys a record share of the Canadian meat market and high prices, the soaring cost of feed grain could jeopardize its progress, says the chair of Chicken Farmers of Canada.
David Fuller said feed costs have been rising so quickly that the chicken pricing formula cannot keep up. There can be a month’s lag between feed price increases and adjustment of the chicken price.
“This clearly is a disadvantage for producers,” he said. During that month, they are not being fully compensated for higher expenses.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
At the same time, prices paid to producers are increasing because of feed costs while wholesale prices are dropping because of market competition.
“This is putting a real squeeze on the primary processor who have to pay more but are receiving less,” said Fuller. “And this is a concern for us because we need a healthy processing sector to buy our product.”
Meanwhile, even at retail, higher prices are an issue. During the past year, chicken prices in grocery stores increased close to three times as much as price increases among competitor beef and pork products.
“Obviously, that could lead to people making other purchase choices and that could hurt our market share.”
Last year, chicken captured a record 33 percent of market share in meat protein purchases in Canada, surpassing in recent years both pork and beef as the Canadian meat of choice.
Chicken prices across Canada are based on an Ontario calculation that takes account of the cost of chicks, feed and a producer margin. The calculations are then applied in other provinces with some modifications.
