Australian chicken prices expected to rise

06-10-2010 | | |

The price of chicken meat in Australia has been kept low by passing on to consumers the benefits of substantial efficiency gains in all areas of chicken meat production. In fact, in real terms, the price has fallen by 75% since 1960.

In other words, if the price of chicken had kept up with inflation over the past half a century, we would now pay $40 for a whole fresh chicken rather than $10. “Now, a point has been reached where prices will have to increase for the industry to remain profitable and able to meet the increased demands for its products”, says Dr Andreas Dubs, Executive Director of the Australian Chicken Meat Federation.

The World Bank reports that since mid-June, global grain prices have been rising with a 56% rise in global wheat prices and knock-on impacts on other commodities such as rice, maize, and sorghum and Australia is by no means immune to these increases.

Grain represents the major input cost into growing meat chickens and thus it is obvious that the latest increase in the cost of feed, together with substantial increases in energy costs, transport and water as well as labour over the past year must lead to an inevitable increase in the cost of chicken to the consumer.

Dr Dubs, however is keen to stress that even with the price of chicken increased to reflect the significantly increased cost of production, chicken will remain affordable in all its various forms from whole chickens and breast fillets to chicken mince and sausages. Indeed, ABARE forecasts a further 10% increase in per capita consumption over the next five years in line with past trends, while beef consumption is predicted to fall by a similar amount.