Chicken is set to become even more expensive for Australian consumers as higher costs persist, while some breeding issues have caused a shortage of poultry, according to one of the country’s top processors.
(Bloomberg) — Chicken is set to become even more expensive for Australian consumers as higher costs persist, while some breeding issues have caused a shortage of poultry, according to one of the country’s top processors.
The industry is being squeezed by high labor, packaging and fuel costs, with wheat and soymeal feed expected to remain elevated because of tight supply, Inghams Group Ltd. Chief Executive Officer Andrew Reeves said on an earnings call. The company reported a 55% slump in first-half net income on Friday.
Adding to Ingham’s headaches has been the shortage of high quality eggs due to some fertility issues, reducing the number of birds. The company said there had been some improvement but that it would take time to see the benefits.
Over the six months ended Dec. 31, Ingham’s average selling price for poultry in Australia was A$5.83 a kilo ($4), compared with A$5.37 in the previous corresponding period, according to an earnings presentation. A further price hike risks eroding chicken’s popularity with inflation-weary consumers, who are already buying less meat globally as costs soar.
Inghams shares fell as much as 7.3% in Sydney after the earnings result before recovering slightly to trade 1.5% lower. Goldman Sachs Group Inc analyst Michael Peet said he remains cautious on the producer’s ability to fully pass on higher costs, which are widespread across the entire supply chain.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.