Poultry raisers threaten to cut down production
By Madelaine B. Miraflor
A group of local poultry raisers has threatened to cut down their production if the government will not act on the crisis they are currently experiencing brought about by low demand, high production cost, and high levels of importation.
“Poor demand, high input costs, and high levels of importation and frozen inventory would compel corn, chicken, and pork producers and even importers to take a conservative stance in the coming months,” United Broiler Raisers Association (UBRA) said in an open letter to the Department of Agriculture (DA) Secretary William Dar.
When sought for clarification, UBRA Chairman Gregorio San Diego Jr. said “taking a conservative stance” means cutting down production.
“This is a very difficult time for consumers and producers. Input costs are at 5-year highs. Consumer demand is still low because of the effects of COVID 19. Import arrivals and frozen meat inventories are disproportionately high in relation to the demand situation. We are on dangerous ground,” UBRA told Dar.
“Disruption is the norm in world food production and trade because of the pandemic and increasingly, climate change. We need to abandon the complacency caused by the ‘we can always import’ mindset,” it added.
As of last week, the soya bean meal – a primary animal feed ingredient – coming from the United States (US) is trading at P55 per kilogram (/kg) to 56/kg from an average of P29/kg in October. It was only P28.37/kg in March and P27.30/kg in July.
The reason for this, according to suppliers, is that shipments from the US are delayed because of the supply chain problems mainly in the port areas.
Compared to a price level of P15.62/kg in March and P18.09/kg in July, prices of yellow corn – which is also a primary animal feed ingredient – are now ranging from P21/kg to P23/kg, depending on the quality. It peaked at P24/kg in October.
This, while coco oil is currently at P88/kg to P91/kg. In March and July, the range was P60/kg to P70/kg.
Soya bean meal, yellow corn, and coco oil are the macro ingredients for feeds. Prices for components like amino acids, vitamins, minerals, and others have also increased.
“We are apprehensive that it will spike some more in the coming months. Aside from the alarming increase in fertilizer prices, the negative reaction of farmers to the study launched by the DA on whether to reduce tariffs has caused reduced planting intentions,” UBRA said.
“Generally, the industry has mostly been just suffering losses or at just breakeven since June, especially the small-and-medium-scale players. The lockdowns have exacted a heavy toll. Demand from hotels, restaurants, and institutions has not yet recovered,” it further said.
Retail prices of chicken and pork, based on the DA Bantay Presyo on November 16, 2021, have been inelastic at an average of P160/kg and P320/kg to P360/kg, respectively, despite periodic collapses at the farm gate. High frozen inventories and import arrivals have had no significant impact on retail prices too.
Chicken import arrivals this year are expected to surpass the total of 402.7 million kilograms in 2020. Data from the Bureau of Animal Industry showed that from January to October 2021, chicken imports already stood at 335.3 million kilograms.
In order to avert or mitigate problems, UBRA said the DA should restore confidence in the corn industry.
“The DA should stop efforts to reduce corn tariffs at the present time. It is now backfiring. It is aggravating the present high prices of corn which is rooted in the failure of the DA to assist corn farmers when there was an oversupply in the last two years,” UBRA said.
“Any tariff reduction should be properly sequenced, with proper consultations, by first having price supports and post-harvest facilities in place,” it added.
In addition, the DA is urged to give due consideration to the proposals of Philippine Maize Federation, Inc. (Philmaize) on the provision of post-harvest facilities.
The group also said the DA must implement the Buffer Fund policy provided in Section 9 of Republic Act 7581, otherwise known as the Price Act, to serve as a cushion both for consumers and producers.
The policy states that the DA as the implementing agency “may procure, purchase, import, or stockpile any basic necessity or prime commodity, devise ways and means of distributing them for sale at reasonable prices in areas where there is shortage of supply or a need to effect changes in its prevailing price.”
“This provision must be used to establish strategic reserves as has been done all over the world to have resilience in the food system. We hope this matter will merit your attention considering your busy schedule,” UBRA further told Dar.
Source: Manila Bulletin (https://mb.com.ph/2021/11/18/poultry-raisers-threaten-to-cut-down-production/?utm_source=rss&utm_medium=rss&utm_campaign=poultry-raisers-threaten-to-cut-down-production)
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