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Squeezing poultry farmers

A 16%-increase in feed costs is squeezing some poultry farmers into raising their prices, according to the past president of the Grenada Association of Poultry Producers (GAPP).

As forewarned last week by Prime Minister Dr the Hon Keith Mitchell and Minister of Finance Hon Gregory Bowen, Grenadians can expect price hikes in food and fuel as a result of the war between Russia and Ukraine, now in its fourth week.

On the evening of March 17 when egg producer and long-time executive member of GAPP, Jason Phillip, learned of the change in February prices by Caribbean Agro Industries Ltd, he began calculating what the new feed prices would mean for poultry and egg farmers. His determination for the impact of the 16%- increase is based on formulas he developed over the years that set feed at 70% of production costs. His advice to GAPP members is to add the 16% proportionately to their prices, whether they sell to wholesalers or directly to retail outlets.

“If the mill increases the price, no matter what volume you purchase, you have to calculate all the variables into your sale price,” he told The Grenadian Voice on Tuesday (March 22). In his text to GAPP members on Friday (March 18) he recommended the wholesale price of a whole fresh chicken should be $7.83 per pound; this covers the 16% or $1.08-per pound increase. The wholesale price of a tray of 30 eggs should increase by $3.68 to $26.68.

He noted too that the price of counter flour has increased by 14% and baking flour by 12%. In making the announcement, ADM, the parent company of Caribbean Agro, stated that “the increases of our products are significantly below many of the price increases of our production inputs. Wheat, corn and soymeal, for example, have experienced significant increases over the past year in the amounts of 63%, 56% and 52% respectively.”

On Thursday (March 24) GAPP issued a statement recommending an increase in the prices of eggs and meat sold by local farmers following the 16% increase in feed costs.

“The recommended minimum price for poultry products is as follows: Whole chicken: $7.00 per lb Eggs (30 count tray): $25.00 The prices listed are only a guideline to farmers based on the increase in feed cost which is the major portion of production inputs. This increase is expected to take place with immediate effect,” GAPP stated.

The new feed and flour prices went into effect on Monday (March 21) and reflect the escalating global demand for grain amidst fears of shortages. Corn climbed to $7.56 (US) per bushel this week, the first time it surpassed $7 since 2013. The per-bushel price of oats was $7.21 (US) on Tuesday (March 22), while wheat climbed to $11.19 (US) per bushel on Monday (March 21).

Russia and Ukraine account for approximately 30% of world wheat exports; Russia has banned wheat exports. Ukrainian farmers face the conditions of war that may prevent them from planting crops as seeding season approaches; and if they do produce crops, they may not have the infrastructure to deliver or export due to the massive destruction taking place in their country.

Still, the rising cost of food has some poultry farmers hesitant to increase their prices. Since Phillip issued his message to farmers, he has had mixed responses. Some expressed fears of pricing themselves out of the market, while others worried about the ability of people to pay higher prices.

“This is something out of our control. I can appreciate that farmers are seen as caring, but we are running businesses. We have to increase our price to stay in business,” he said adamantly, rejecting the suggestion by some producers that his calculations are not accurate.

Moreover, he said government should ensure Caribbean Agro gives farmers adequate notice of price increases in advance, not just a few days before the new prices take effect.

As for Phillip and his egg operation at Laborie, St George he advised his customers on Monday (March 21) why his increase that took effect on Wednesday (March 23) is unavoidable.

“This increase in price of our product is significantly below the many of the price increases of our production inputs. Day old chicks, operational supplements and replacement equipment for example [have] experienced significant increases over the past year in the amounts of 7%, 22% and 35% respectively.”

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