(Zero Hedge)—As US consumers shift from beef to chicken due to elevated supermarket prices, exacerbated by a rapid decline in US cattle herds, one of the world’s largest chicken producers has issued a dire warning that chicken prices could soon increase.
Bloomberg reports that Pilgrim’s Pride Corp. and the industry as a whole have developed ‘hatchery issues’, which means a large number of eggs in incubators aren’t hatching.
On Thursday, Pilgrim’s Chief Executive Officer Fabio Sandri told investors during an earnings call that the hatchery issues stem from a new breed of rooster (Frankenchickens?) that requires closer management, indicating this is the primary cause of the decline in fertility rates industrywide.
“We don’t have the housing to separate the males by weight. We don’t have the labor to individually weigh all those males to make sure that they are at the optimal weight for reproduction,” Sandri said.
Pilgrim said because of hatchery issues, chicken production nationwide is projected to grow much less than the US Department of Agriculture’s 1.5% estimate.
USDA data shows that the number of eggs hatched began dropping right after the Covid pandemic in late 2020, from 81.5% to now 76.5%. That compares with averages above 80% over the last decade.
“The hurdle to expand production comes at a time when consumers are turning to poultry as they seek cheaper alternatives to beef,” Bloomberg noted.
Retail prices of chicken boneless breast, measured by USDA, surged from about $3 a pound in early 2020 to $4.75 a pound in September 2022, primarily due to commercial farms culling large flocks due to the bird flu. Prices have since subsided to about $4.1 a pound but risk moving higher on lower production trends.
Meanwhile, consumers have been shocked by skyrocketing beef prices as the nation’s herd size recently plunged to 73-year lows.
And the UN’s global food index risks turning back up as stagflationary threats emerge in the US economy.
Meat prices are becoming super expensive for working poor households. Bill Gates is getting his wish…
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as a 25 + year contract grower for Pilgrims, the hatchery issues are real but it is a problem shared industry wide because of the male breeders which are supplied ultimately by Tyson. Not the end of the world, just a year or two to work them out of the system.
The real problem is the antibiotic free movement we’ve been dealing with for the past 8 years. 7-10% mortality regularly just because the company refuses to diagnose or medicate health issues within flocks, leaving the grower”holding the bag”. Companies garnered a premium for the antibiotic free products while passing the added expense of production on to the growers. I’ll never eat antibiotic free anything because it means the animal has been sick its whole life.