Broiler raisers have been lamenting about the declining liveweight prices of chicken, with prices falling by more than P20 per kilo after Christmas, the steepest decline ever.
According to United Broiler Raisers Association (UBRA) chairman Elias Jose Inciong, while it has already been traditional that after Christmas, there is a drop in demand and supplies are high, what makes this year different is that there is a record drop in prices.
He noted that while inventory is equal with last year’s, demand this year is poorer.
UBRA reported that the average liveweight price of regular-sized broiler (1.5 to 1.69 kilos) as of Dec. 27 collapsed to P110 per kilo from P131.50 per kilo last Dec. 20. Prices continued to decline after Dec. 27 to as low as P110 per kilo which is the breakeven cost for most broiler raisers.
Inciong said that the drop is very precipitous, with the decline in prices after Christmas only around P5 to P10 per kilo.
It has been noted that the drop in liveweight prices comes at a time when broiler raisers reel from higher production costs, in particular the elevated day-old-chick prices that have remained above P40 per head throughout last year.
As early as last November, UBRA had been complaining that farmgate prices for broilers or chicken raised for meat production have dropped to P80 per kilo, which is way below the estimated production cost of P105 to P110 per kilo, leaving broiler producers with losses of around P25 to P30 per kilo of chicken.
In June of last year, the farmgate price or the price at which farmers sell their produce, was at P159.94 per kilo.
Chicken farmers were hoping that the usually high demand for chicken during the holiday season would bring farmgate prices up. Unfortunately, this did not happen.
What is sadder though is the fact that while the liveweight prices, referring to the price of chicken before it is dressed, has dropped significantly, the retail price of dressed (slaughtered, defeathered, eviscerated whole bird with the head and feet removed and ready-to-cook) chicken has remained stable.
According to reports from the Department of Agriculture, the retail price of dressed chicken remained at P180 to P250 per kilo in key Metro Manila markets.
Latest data from the National Meat Inspection Service also revealed that the nationwide dressed chicken inventory remained above 55 million kilos with at least 40 million of which are imported stocks.
This means that while demand may be there, there is simply too much supply of dressed chicken, mostly imported and usually cheaper.
UBRA chairman Gregorio San Diego last November attributed the low farmgate prices to a surge in broiler chicken imports despite recent declines in consumption.
With consumers also not benefitting from the low farmgate prices, San Diego said that it is the importers who benefit as they can slightly reduce their prices to encourage consumers to purchase imported broilers over locally produced ones.
If neither the producers nor the consumers are benefitting from the situation, then there continues to be something seriously wrong with the way government has been dealing with the problem, with traders and importers the only ones being favored by this flawed structure of our agricultural sector.
In a December 2024 report, the Philippine Council for Agriculture, Aquatic and Natural Resources noted that the Philippine poultry industry is experiencing a crisis characterized by a sharp decline in farmgate prices due to oversupply, a surge in imports and persistently high retail prices.
It pointed out that the disconnect between farmgate and retail prices emphasizes the significant market inefficiencies in the supply chain. This disparity, the report explained, not only diminishes the profitability of local producers but also raises concerns about fairness, transparency and distribution of value across the supply chain.
The report projects that due to an oversupply of chicken in the market, the broiler chicken sector is expected to face sustained downward pressure on farmgate prices in the short term, adding that the gap between farmgate and retail prices benefits importers while local producers struggle to stay profitable.
It also stressed that the oversupply in the poultry market, worsened by the lingering effects of typhoons, may continue to suppress farmgate prices as the year progresses, challenging the sustainability of local production.
The report recommended government interventions and potential adjustments in the pricing structure to address these market imbalances and stabilize prices in the coming months.
It also noted that public support is equally crucial, as consumers can help by prioritizing locally produced poultry, directly aiding struggling farmers. Advocating for policy reforms to ensure fairer pricing mechanisms can contribute to a more equitable and sustainable poultry industry, it added.
The paper, written by Clarizel Gomez, also mentioned about a proposed livestock bill which has already passed the Senate that targets P15 billion in tariff collections to be earmarked for the livestock, poultry and dairy competitiveness enhancement fund to support disease control, repopulation, food safety and animal feed production programs.
The bill seeks to address rising costs and outbreak of disease and proposes a 10-year livestock and poultry development fund, modelled after the Rice Competitiveness Enhancement Fund (RCEF) to assist small-scale farm raisers. Counterpart bills are still pending in the Lower House.
Unfortunately, while those who created the RCEF may have had the best of intentions, it has so far failed to uplift the situation of rice farmers in the country. The Rice Tariffication Law of 2019 enabled rice importers to sell larger volumes of rice in the country by paying tariffs of at least 35 percent, eliminating the previous cap on imports. The RCEF receives its funding from tariffs on rice imports.
There are those who espouse the view that the Philippines is better off importing what it needs, if local producers cannot compete.
Are we ready to say goodbye to our Philippine agricultural sector? Will attaining food self-sufficiency and food security for the country remain just a pipe dream?
Reliance on imports makes us vulnerable to the vagaries of the world market. What would happen if major exporters were to reduce or to stop their exports just like what happened at the height of the Russia-Ukraine war? Or what if there is a heat wave or drought?
A study by the Mercator Research Institute on Global Commons and Climate Change has estimated that worldwide, the potential collapse of food imports threatens the food security of 200 million people.
It noted that major exporting nation such as Russia, Thailand and Vietnam tend to adopt restrictive export policies when seeking to pull their own domestic markets through difficult time, such as during extreme weather events which take its toll on harvests.
Depending on other countries for our basic needs will expose us not only to geopolitical risks such as wars but other risks such as those that are weather-related, shipping disruptions, whims and caprices of our trading partners and international institutions, among others.
Losing our agricultural sector and domestic production to imports should never be an option. A strong agricultural-based economy is important not only for food security but also for employment and income especially in rural areas. Just look at Vietnam and Thailand. They are able to attain economic progress while having a strong agricultural sector. They remain as huge agricultural exporters. Except for Brunei and Singapore, agriculture remains as the main source of livelihood in the region.
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