Friday, September 14, 2012

Chicken costs, prices soaring


Feed costs have increased by 21 per cent from the year-to-date average, triggering a cost-of-production formula increase of 11.9 cents per kilogram when chicken farmers begin shipping birds after Nov. 4 in quota period A-113.

But the board says it is “temporarily buffering the impact” and taking an increase of 9.9 cents, which puts the base price at $1.73 per kilogram liveweight.

The board also notes in a special-edition newsletter to producers that it realizes they have been paying higher feed costs during the current six-week quota period without any market-price relief.

The same sharply-rising feed costs are going to hit all supply-management commodities – milk, eggs and hatching eggs.

What that will do to downstream customers remains to be seen.

In the hog and beef industries, many farmers simply can’t afford the higher feed costs and are shipping their livestock to market. That depresses market prices and increases losses.

Two of Canada’s largest hog-producing companies have declared bankruptcy and more will inevitably be following.