Chicken shortage warning before Christmas

The cost of chicken at restaurants, pubs, clubs and cafes is tipped to rise by up to 12 per cent, as a result of “significantly higher than normal mortality rates” at one of the country’s largest breeders due to “issues with their bird”, according to an industry notice sent out by YCC Poultry last week.

YCC Poultry, a Sydney-based chicken supplier, was relaying to its customers what it had been told by processors when asked why there had been a “sudden” reduction in supply and pricing increases.

The chicken breeder reported to be suffering the mortality issue did not respond to requests for comment, directing inquiries to its overseas office.

“We’re not privy to what’s causing it but [it accounts for] 60 per cent of chicken in Australia, so it’s going to cause some serious spikes,” said Nathan Lo Russo, head of supplier relations at Foodbomb, a food industry ordering platform.

Mr Lo Russo said chicken producers were already struggling with significant staff shortages due to Covid, reducing the output and capacity of factories across the country.

“Processing plants in some cases are down 15 to 20 per cent of labour on any given day,” he said.

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Prices were already rising due to petrol, electricity and wheat supplies – the main ingredient in chicken feed – affected by the Ukraine war, leading to a perfect storm for chicken suppliers.

The falling Australian dollar has also affected suppliers’ ability to purchase other imported chicken feed ingredients such as soybeans.

Mr Lo Russo said the shortages would begin to bite for the food service sector during the Christmas period due to fixed contracts producers have with major retailers Woolworths and Coles.

“They have to stick to [contracted] volume, so when there’s any shortage the food service sector feels the brunt,” he said.

Master Poultry sales manager Jim Hoang said his business was already experiencing a significant drop in supply.

“I’ve had so many people calling asking me for prices and wanting to buy chicken, but we just don’t have enough, not even for our regular customers,” the West Footscray-based distributor said in a statement.

“We haven’t seen any price increase on our free-range chickens for five years, but recently we’ve had two price increases. Overall chicken prices have gone up 25 per cent and we’ve been told to prepare for more, with another price increase coming next week.”

Mr Hoang said because the price of feed was so high at the moment producers “reduce their farming so they don’t have to feed and process as many chooks and because the supply is low, prices go up and they get more money for fewer chickens”.

“On top of that, the price of fuel, utilities and rolling labour shortages are making it worse,” he said.

“The industry has never seen this before, because historically the prices go up and then they come down, but now they just keep going up. Over the last 30 years, chicken has consistently been the same price, but we’re hitting record prices now. We’re telling our customers to prepare for rolling shortages because even if they shop around, other suppliers will tell them the same thing.”

Mr Lo Russo predicted while the shortage was currently at the supplier level, “the reality is it will hit all of Australia soon”.

“Anything that hits the market where there’s a shortage of birds, it’s an average six to eight week lag from the time it’s corrected or fixed [to supply returning to normal],” he said.

“That takes you into February or March where we’ll see things correct.”

However, the Australian Chicken Meat Federation has denied reports of any supply issues.

“The ACMF is not aware of any issues in chicken meat supply or any anomalies across the broader supply chain,” a spokeswoman for the peak body said. “Australians will be able to enjoy their favourite meat for Christmas and throughout the holiday season.”

It comes after Aussies were warned they could be paying up to $10 more for a case of beer this Christmas.

Queensland University of Technology marketing professor Gary Mortimer told NCA NewsWire three compounding factors were causing the spike in beer prices.

“One is the impact to barley crops across the eastern seaboard inundated by flooding and high rainfall,” he told NCA NewsWire.

“That means there’s less raw materials to move into production. The second reason is the increased production costs, including higher prices for water, electricity and fuel for logistics. And finally the alcohol excess applied every six months, which is currently 3.8 per cent. It’s a triple whammy.”

Australia’s inflation rate rose 1.8 per cent in the September quarter, bringing the annual rate to a 32-year high of 7.3 per cent.

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