If the Price of Chicken Rises and the Price of Beef Does Not Rise Consumers Will Respond by
Poultry prices, especially prices for chicken breasts, have skyrocketed due to surging demand, tighter supplies and a transitioning supply chain, according to Texas A&M AgriLife Extension Service experts.
David Anderson, Ph.D., AgriLife Extension economist, Bryan-College Station, said wholesale chicken prices continue to rise as demand from restaurants has put pressure on supplies of certain poultry cuts.
Anderson said U.S. poultry production declined during 2022 as the industry grappled with shifting demand associated with the pandemic. Poultry companies struggled to find profits as closures impacted restaurants, a major destination for various chicken cuts.
But the subsequent economic reopening and growth has caused tight supplies and rising prices for chicken breasts, which consumers find in a variety of forms and places, Anderson said.
Wholesale boneless, skinless chicken breasts were $1.91 per pound compared to 93 cents per pound last year, Anderson said. Between 2022 and 2019, those cuts averaged around $1.18 per pound wholesale.
"There is a lot of chicken being produced, but we are seeing restaurants that aren't getting as much supply as they want to get," he said. "There is plenty of chicken, but when you have all these chains making chicken biscuits and chicken sandwiches, which are a hot product right now, and they're all made of chicken breasts, there is only so much of those specific cuts to go around."
High demand and high prices for chicken breasts and other cuts like wings, which remained relatively high throughout 2020, could last until production catches up again, he said. Cold storage supplies of chicken are also down 200 million pounds, roughly 20%, compared to last year, which further tightens the supply side.
"Low prices and lower production were a reaction to last year, and now demand is high because there is a feeling that we're returning to normal," Anderson said. "The thing is that chickens just have two legs, two breasts, two thighs and two wings. It just takes time to produce more chicken."
Chickens return to normal
Craig Coufal, Ph.D., AgriLife Extension poultry specialist, Bryan-College Station, said short supplies have mostly to do with poultry production returning to normal levels and the time it will take to meet pre-pandemic supply demands.
The more people return to restaurants, travel and "get out of the house," the more chicken they are likely to eat, Coufal said.
"The birds that were being grown during the pandemic were grown smaller because they were going to end up in grocery stores," he said. "The birds that meet the demand for chicken strips and sandwiches and processed nuggets are much bigger, and it can take some time to shift production. It will happen, but it may take some time."
Coufal said poultry producers are cranking out as many chickens as they can to meet erupting demand. But it takes fertilized eggs to produce chicks, which take time to become broilers that are ready for processing.
Feed costs a wild card
A wild card in the rocketing chicken market is feed prices, Anderson said. Corn and soybean prices have been very high compared to recent years and represent an added component to what chicken will cost once it reaches a restaurant or grocer.
Coufal said restaurants willing to pay a premium for chicken breasts may drive the price to unprecedented highs at grocery stores. Anderson said it will be interesting to see if constraints on cuts like breasts and wings drive restaurants and grocery customers to purchase more dark meat, such as thighs and legs, that are now primarily tagged for export.
"I would expect to see more consumption of boneless chicken thighs than we've seen previously," Anderson said. "So, you may see increased purchases at grocers and also some restaurants trying to figure out a way to utilize those cuts in order to meet demand and cut costs where they can."
AgriLife Extension district reporters compiled the following summaries:
CENTRAL
No report.
ROLLING PLAINS
Conditions were favorable for producers. Areas received beneficial rainfall, but some areas experienced severe weather with high winds and hail. Farmers continued to prepare cotton fields for planting after the rainfall by putting out preemergent herbicide and listing fields in hopes to begin planting in the next few weeks. Pastures and rangelands looked better each day, and livestock were in fair condition. Supplemental feeding of cattle continued, but on a reduced scale as some producers were taking advantage of wheat to graze. Some wheat fields were showing signs of rust.
COASTAL BEND
Some much-needed rain fell across parts of the district. Rain amounts were mostly 1-5 inches and up to 8 inches in some areas. Cotton replanting occurred before the rain, mostly due to seed quality issues. Cotton was coming up and producing good stands. Most crops should benefit from the rain, and corn fields were days from being in trouble due to drought. Downy mildew was identified in Wharton County sorghum, and testing of pathotype was in process. Many stock ponds were refilled, but a fair amount were still short of normal levels. Rangeland and pasture conditions should improve but will take a little time to see ample forage growth. Hay producers should expect higher quality and quantity for early season harvests, which was needed as hay inventories were still low. Producers with on-farm corn storage were able to take advantage of current corn prices. Livestock were in good condition despite the short pastures. Livestock prices were down some, and many producers were doing some early weaning to help their drought situation, but recent rainfall should reduce culling. Pecan nut casebearer moth monitoring identified spray dates for first generation pecan nut casebearer as May 5-8.
EAST
Many counties received much-needed rainfall. Some, like Smith County, still needed more. Sabine County reported being thoroughly saturated. Pasture and rangeland conditions were good. Subsoil and topsoil conditions were adequate. Recent rains and warmer temperatures improved growing conditions considerably. Livestock were doing fair to good. Fertilizer prices increased causing producers to worry. Horn fly populations increased, and efforts were made to control them. Feral hogs remained a problem, causing damage to pastures and hay meadows.
SOUTH PLAINS
Some counties received between trace amounts up to 4 inches of rain depending on location. Rain should help pasture conditions. Most cattle producers still needed runoff rains to fill tanks. The rain received was helpful, but much more was needed for cotton planting over the next six weeks. Much of the wheat was cut for hay. Cattle were in good condition.
PANHANDLE
Northern parts of the district reported short to adequate soil moisture while central and southern areas reported very short to short soil moisture levels. Pasture and rangeland conditions were very poor to fair. Rangelands were improving in areas with moisture and declining in drier areas. Winter wheat was in poor to good condition, and oat conditions were fair. Dry windy weather caused wheat conditions to decline in some areas. Wheat was being irrigated. Wheat should be heading soon. Corn planting was in full swing, and cotton planting was expected to begin soon.
NORTH
Topsoil moisture was adequate to surplus. Rainfall amounts were 2-6 inches across the district. This much-needed rain should help pasture grasses take off. Bermuda grass and hay meadows were green. Corn and soybeans should jump in growth due to rainfall and warming temperatures. The late frost didn't seem to affect corn, and winter wheat and oats were still growing. Some counties reported a delay in cotton and soybean planting due to the significant rainfall they experienced. Livestock were in good condition. Spring-born calves were doing well. Flies were causing stress for livestock. Feral hogs were very active lately.
FAR WEST
Temperatures still fluctuated greatly with daytime temperatures ranging in the mid-90s to lower 60s and nighttime lows reaching 55 degrees. Overcast conditions and sporadic rainstorms were reported in the central parts of the district producing as much as 3.5 inches of rainfall. The rainfall should be very beneficial but will not break the current drought conditions. Moisture probes showed moisture has soaked down approximately 4 inches, but soils remained very dry below that point. The rain should freshen up the corn and start sorghum emergence. Watermelons should benefit from the rain as well. What little wheat survived should show increased test weights from the rain, but yields should not increase. Weeds were expected to begin emerging and require control. Pasture grasses should begin greening up. Pecan producers were getting ready to start monitoring for pecan nut casebearers. Winter wheat was baled for hay. Beef cattle were still in overall good condition, but producers continued to reduce herd numbers due to exceptional drought conditions. Marking of lambs was complete and shearing and shipping should begin soon. Producers continued to feed livestock and wildlife. Planted acreage was likely to be cut in half or more in the Rio Grande Valley due to the lack of project water. Most cotton was planted with about 25% left to plant. All cotton fields were pre-irrigated, and many pecan orchards were receiving their second irrigation, either from private wells or effluent water or district wells from the El Paso County Water Improvement District No. 2. Most wells produce poor quality water that can negatively impact soils in the long term. Established alfalfa fields were also being irrigated. Most parts of El Paso County received some rainfall, traces up to half an inch in some areas.
WEST CENTRAL
Heavy rains and cooler temperatures were prevalent. Rainfall amounts ranged from 0.5 to 5 inches across the district. Winter wheat fields were in mostly good condition following rains. Some hail damage was reported. Rangeland and pasture conditions improved and were creating good grazing for livestock.
SOUTHEAST
Conditions continued to dry in some areas, but few counties reported heavy rains with 2-5 inches reported in some areas. Farmers put more water on fields to get rice to sprout. Rice plantings continued. Pastures were on both ends of the spectrum due to sporadic rainfall with some grasses starting to grow while others were stalled by dry soil. Winter wheat was set back in some spots due to the heavy rains. Rangeland and pasture ratings were excellent to very poor with fair ratings being the most common. Soil moisture levels ranged from adequate to very short with adequate being the most common.
SOUTHWEST
Rainfall was reported across the district with some areas receiving 3-6 inches. Some areas reported severe weather and lost crops due to hail and heavy winds. Pea-size up to softball-sized hail was reported. Pastures and rangelands were not affected by the severe weather and should benefit from the added moisture. Corn was responding to recent rains as well. Spring shearing continued, and livestock were in fair condition. Supplemental feeding of livestock continued. Some producers were thinning herd numbers in anticipation of a dry summer.
SOUTH
Most areas were very short on soil moisture, but some parts of the district reported adequate moisture levels. Some counties reported rainfall with amounts ranging from a trace to 4.5 inches. Several areas reported rainfall amounts of between 1-3 inches. Wheat and oat crops continued to mature, and fields were being prepared for harvest. Corn continued to develop and was getting close to the tassel stage. Cotton planting continued, and planted fields continued to progress. Cotton, corn and sorghum responded well to recent rains. Producers continued to prepare fields, including peanut acres. Pasture and rangeland conditions started to improve in areas that received moisture, but drier areas remained in poor condition. Livestock supplemental feeding continued. Hay was scarce, and prices were still going up with bales ranging from $85-$100. Cattle culling continued, and body conditions were declining in some areas. Cattle prices were slightly lower due to high volumes at sale barns. Feed costs for cattle and wildlife increased. Wildlife continued to search for food and water along roadways. Stock tanks were filled by recent rains.
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Source: https://agrilifetoday.tamu.edu/2021/05/04/chicken-prices-rising-supplies-low/
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