Poultry growers seek long-term solutions as inflation hits industry

MANILA, Philippines — The government must come up with long-term solutions to ensure that the Philippines will continue to have enough supply of chicken amid the still elevated prices of various commodities, poultry stakeholders said.

United Broiler Raisers Association (UBRA) chairman Gregorio San Diego said feed prices are now at an all-time high, prompting the cost of production to increase as well.

American Chamber of Commerce Agribusiness Committee chairman Christopher Ilagan said the poultry sector has heightened its vigilance on pressures that may cause prices to rise, especially input costs, animal disease and general supply levels.

The reduction of corn tariffs managed to help the industry and provided a base to keep prices a bit tempered amid a high-inflation environment.

It should be noted that corn constitutes up to 60 percent of feed costs, while feed costs constitute roughly 70 percent of poultry meat production.

However, to make the tariff reduction really effective, Ilagan said the government should rethink the minimum access volume (MAV) of 217,000 metric tons when the deficit is a high of three to five million MT.

“An increase in the MAV quota for corn coupled with a more equitable distribution of MAV allocations can more drastically help bring down corn prices, which saw a 26 percent increase,” Ilagan said.

Vitarich Corp., one of the country’s pioneers in poultry and feed manufacturing, lamented that there is not enough supply of corn.

Vitarich spokesperson Karen Jimeno said the ideal situation is to have corn prices stable for the year so as not to suffer spikes in input costs.

“The right policies should be put in place as soon as possible so that the price of inputs can be stabilized sooner,” Jimeno said.

“It’s really the purchasing power of the consumers that determines our selling price. There is a certain threshold in the retail prices after which higher than that price, consumers will no longer buy, then prices will decline,” she said.

The stakeholders noted that rather than looking at reactive solutions like increasing imports, the Philippines needs long-term solutions that support the local value chain.

For one, Jimeno said the government must improve infrastructure to support the value chain, as well as rationalize the taxes imposed by national and local governments.

“For instance, poultry producers pay varying local taxes when simply passing through different cities or municipalities; apart from the cost, the lack of uniformity makes doing business more complicated,” she said.

She said the government should eventually steer away from relying on imports of chickens as doing so is not only ineffective but also harms everyone in the local value chain.

“The local chicken industry has the capacity to meet market demand, but there are factors that prevent it from ramping-up consistently,” Jimeno said.