While poultry remains the least expensive animal protein, prices are at a sustained multi-year high. Prices normally fluctuate in somewhat of a seasonal fashion, as seen in the 3-year average line above. COVID caused an extreme disruption to the downward side in Q2 2020. Then 2021 changed everything again. Early spring brought the market back to somewhat normalcy as dining away from home regained popularity. Then the highly touted “chicken sandwich wars” heated up as restaurant chains pushed for ways to get customers back through the doors. These and other improving market conditions began to drive prices up in early Q2 ‘21. At the same time, company processing plants struggled with employee absenteeism. Combined with sustained transportation issues and other supply chain weaknesses from the last year, the supply of chicken was unable to keep up with the new soaring demand. The result is sustained high and rising 2021 prices (brown line in chart).
Monthly Composite Broiler Price, Weighted Average $/cwt
What will 2022 bring? As poultry companies try to expand live operations to meet demand and keep plants operating at full capacity, they are meeting difficulties on both fronts. Despite increasing plant wages, many are still reporting sustained 20%+ absentee rates for many shifts. Then along came increasing prices for building materials and labor. Contract growers who raise the chickens are finding it almost impossible to afford to build the new housing integrators need to supply more birds to the market. To secure new housing, integrators are having to invest more into the farms, increasing live production costs. It is suspected that these factors along with continued supply chain struggles will ultimately influence prices to stay high in 2022, and possibly beyond.