Chicken to Get More Costly27 July 2012
AUSTRALIA - Consumers should prepare for the price of their favourite meat, chicken, to go up soon.
According to ABC, the Chicken Meat Federation says the price of feed grain has gone up by $100 a tonne, or 30 per cent, in the last three months because of the worsening drought in the United States.
The federation's Vivien Kite says Australia's seven key chicken meat producers have not put up prices for the past three years, but they plan to pass on increased feed grain costs.
"Feed costs make up to 65-70 per cent of producing a live chicken," she said.
"So taking all of that into account, we would expect this surge in feed grain prices will push chicken meat production costs up by about 5 per cent."
But an independent retailer says he's expecting much larger rises in chicken prices than five per cent, from next week.
Michael Braidotti runs a fresh food market at Wollongong in NSW, and says his chicken suppliers, Baiada and Inghams, have told him the price will double, so he'll sell it for $11 a kilogram for chicken breasts.
Chicken meat has been dramatically cheaper than red meat, but Mr Braidotti expects shoppers to switch to beef from next week.
"Oh immediately! And the reason that will happen is red meat - there's an oversupply of red meat, therefore the demand will switch off white meat, chicken," he said.
"It will go over to red meat, it will take up the slack, the demand for chicken will drop off and the price should drop back."
But Simon Camilleri, the managing director of Baiada, Australia's largest chicken meat producer, is playing down Mr Braidotti's claims.
He says Baiada will pass on cost increases of up to 40 per cent to consumers.
"The cost of the raw material going into producing chicken meat is going to increase by 30 to 40 per cent, so the knock-on effect will flow onto the consumers or retailers, I presume. I doubt that it will double in price."