Cost of poultry production goes up with 13% jump in feed price

July 07, 2018
The price of chicken fell due to low demand after Ramadan while the cost of production went up due to an increase in feed prices.
The price of chicken fell due to low demand after Ramadan while the cost of production went up due to an increase in feed prices.

By Mohammed Al-Abdullah

Okaz/Saudi Gazette

– National fodder companies have increased prices of bird feed by 13 percent or SR150 per ton. The prices reached SR1,300 against SR1,150 per ton a few weeks ago.

“This has increased the production cost for poultry by 40 halalas per bird,” said a poultry farm investor while speaking to Okaz/Saudi Gazette.

Investors said the increased prices have covered all types of poultry feed including Badi, Nami and Nahi while the price of white poultry feed jumped from SR950 to SR1,100 per ton.

Fodder factories are planning to increase their prices further in the coming months as a result of drought that has hit agriculture in Brazil and Argentina that produce soybeans and barley, the main ingredients of chicken feed.

Soybeans prices have gone up to $325 per ton in the global market while the price for barley has reached $200 per ton. Barley is sold in the local market for SR650 to SR700 per ton and soybeans for SR1,150 per ton.

“Soybeans and barley represent 90 percent of feed ingredients with barley taking 60 percent and soybeans 30 percent,” one industry expert told Okaz/Saudi Gazette.

Dr. Abdul Rahman Lutfi, a sales official at a poultry company, said the increase in fodder prices have raised the cost of poultry production by 40 halalas per chicken.

“A chicken will need 2.5 kg of feed for 32 to 34 days. As a result of the rising costs, the profit margin of poultry traders has gone down considerably in recent years. Meanwhile, chicken prices have dropped now to SR7.75 per bird from SR8.5 in Ramadan due to low demand,” he said.

Ashraf Hassan, another sales official, said if the weight of a chicken before slaughter was 2,000 grams, after the skinning it would fall to 1,300 grams.

Poultry farms in the Eastern Province supply 4 million chickens monthly while the daily consumption of chicken is 90,000. As a major option to overcome the periodic falls in demand, companies keep surplus output frozen, he said. They also export to Bahrain, Kuwait and other neighboring countries, he added.

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