Unusually high cost of feed, especially maize, has prompted poultry farmers to liquidate their stock. As a result of this increased supply of slaughter-ready chicken, farm gate prices — the price at which farmers sell their market-ready birds with an average weight of 2-2.5 kg — have since collapsed. Ironically, this crash comes a fortnight before the start of the holy month of Shravan where consumption of meat naturally dips.
Average farm gate prices of chicken had touched an all-time high in June with farmers reporting average selling prices of over Rs 100 per kg. Higher feed cost, both of maize and de-oiled cake (DOC), coupled with water scarcity had led to a 15-20 per cent dip in production spiking prices. A city like Pune, on an average, reports ‘placement’ (sale) of 90 lakh to 1.10 crore birds per month while about 3 crore birds are sold in Maharashtra during the same time.
However, over the last fortnight or so, exceptionally high maize and DOC prices have put the basic economics of poultry farmers at risk. Prasanna Pedgaonkar, deputy general manager of Pune-headquartered poultry giant Venkateshwara Hatcheries (owner of brand Venky’s), said cost of production has climbed to Rs 75 per kg which has brought about the present distress sale. “Last year, the cost of feed was around Rs 24-25 per kg, which since then have risen to Rs 32-33 per kg levels,” he said.
While farm gate prices have crashed, retail prices are yet to show the effect with chicken prices still being in the range of Rs 140-150 per kg mark.
With rains catching up in various parts of the state, the problem of production has been solved but higher maize prices have put the poultry business at risk. India has reported around 20 per cent dip in maize production due to drought and attack of the new pest, Fall Army Worm (FAW).
The central government has allowed for import of 4 lakh tonnes (lt) maize but the formalities are yet to be worked out. Poultry industry has asked for the imports to be accelerated given the urgency of the matter.
Meanwhile, Pedgaonkar said that the present economic distress would force many smaller poultry farmers to close their business. The present price slide has come before the month of Shravan, when production naturally drops. “This price drop is unexpected and has come as a surprise,” said Pedgaonkar.