The endangered single-piece chicken

In 1984, Wendy’s Burger chain came out with a very popular slogan and challenge to their competitors by calling them out with the advertisement: “Where’s the beef?” Not only was it catchy, it was designed as an outright challenge to the big burger chains regarding their small-sized burger patties and the campaign really got consumers’ attention as well as that of the fast-food industry. All that resulted in multi-level burgers with cheese, with so many add-ons! Now in 2022, in the Philippines, Filipinos are asking “WHERE’S THE CHICKEN?”

A few weeks ago, I mentioned on our TV program AGENDA that there was a possible shortage of chicken after we encountered difficulties getting chicken from Jollibee and McDonald’s. The first one said they were all out of chicken for the day, which felt like MWSS saying they have no water, and the second one said they only served single piece orders of one leg with rice. Two weeks later, several fast-food chains admitted that they are facing challenges providing chicken in “some” of their outlets. Given how chicken is still visible and available in many public markets and groceries, this was stranger than Dr. Strange.

Yesterday, we interviewed Mr. Gregorio “Joji” San Diego, chairman of the United Broiler Raisers Association. Mr. San Diego patiently explained that dressed chicken is readily available and that the problem or challenge faced by the fast-food chains is more the result of their stringent standards on the quality of chickens they buy and disadvantageous terms of payment to raisers and suppliers. I thought that the fast-food chains relied primarily on imported chicken that is cheaper due to foreign government subsidies but Mr. San Diego said that the fast-food chains get their chicken locally but fast-food chains are so particular on the cut-size, weight and quality of the chickens they buy. If the meat is not thick enough, too bony, undersize, overweight, etc., etc., these will be rejected. After that, suppliers to fast-food chains are beaten down in the pricing, lock-in periods and payment terms or number of days before the buyer pays the supplier.

Because they buy in volume and long-term, the fast-food chains and bulk buyers always negotiate prices lower than farm-gate prices. At best, the big farms make a small profit on top of cost of production, but not the backyard raisers or small operators. From there things get really rough and one-sided. Aside from lower than farm-gate, the buyers require a “lock-in” or no price increases anywhere from 3, 6, 9 or 12 months. Nowadays anything beyond two months can spell disaster for poultry producers because of the continued increases in feed, electricity and trucking costs.

The worst deal for poultry producers is the fast-food industry practice of delaying payments to poultry producers by 60 to 90 days. If you delivered chicken pieces to commercial buyers today July 8, you “might” collect payment on Oct. 8 or three months later. This abuse has to be stopped through legislation because it kills MSMEs/business.

According to Mr. San Diego, it takes them an average of 50 days per crop and each crop involves millions of pesos. Unless you are a well-established farm with a long credit line or large capital, the one-sided conditions imposed by buyers, plus the extremely expensive cost of feeds and operations all work together to slowly but surely strangle an operator’s profitability and long-term survival. San Diego’s group sees that our poultry industry and supply situation will be “darker before it gets light” and the future of poultry production is one where backyard growers and small operators will no longer be around. Only large corporations will survive this cut, UNLESS BBM and the DA step in and treat the sector to non-negotiable support in the interest of food security.

Mr. San Diego also shared that our neighbors in ASEAN have stable supplies and thriving poultry industries because of subsidies as well as the fact that countries like Vietnam, Thailand, etc., DO NOT ALLOW the entry of imported chicken into their territories and markets. This policy and approach essentially guarantee anyone that goes into the business that the local market is all theirs and don’t have to worry about unfair competition, product and price dumping and corruption. Because of the guaranteed market, producers have predictability and can therefore confidently invest, expand and hire more employees. It also leads to more affordable products/chicken, etc. which explains why our neighbors in ASEAN also have higher averages in meat consumption. The volumes make the product cheaper to produce and to sell. Many local chicken producers have backed away from the business primarily because the production costs are high and complicated. The problem is we not only allow importation, but smuggling is already an accepted business practice enabled by the DA and the Bureau of Customs.

Breeding stock for poultry mostly comes from abroad. Given our long history and expertise in poultry and genetics, why has the DOST, DA and the DTI and CHED not pooled their resources and finances for the development of a PPP program or facilities for the production of such materials both for poultry and hogs?

Another item giving headaches to poultry producers is that there is no unified policy implementation of quarantines, etc. LGU officials unilaterally decided what is allowed to enter or cross their towns, provinces over and beyond what the DA declared during the initial ASF lockdowns and quarantines for avian flu. Come to think of it, the bird flu was supposed to be limited to quail and ducks but suddenly covered everything and anything with feathers. My pet peeve is the fact that the DA has apparently abandoned the vaccination program for poultry and birds. That should be the first defense, not a memory from the past. In the meantime, enjoy your single piece chicken. It may soon be endangered!