Chicken prices soar as US shoppers flock to cheaper meat

 

US consumers are feeling the pinch of inflation as chicken prices hit record highs at grocery stores. The surge in demand for chicken, seen as a cheaper alternative to beef and pork, has boosted the profits of top poultry producers like Tyson Foods and Pilgrim’s Pride, but also forced them to cut back on production to avoid oversupply.

According to Reuters, chicken prices at US grocery stores have reached
nominal records in August, while beef consumption is forecast to drop to its lowest since 2018 and pork consumption to the lowest since 2015¹. The US Department of Agriculture expects US chicken consumption to exceed 100 pounds per person this year for the first time ever².

Tyson Foods, which sells all three types of meat, had to deal with a glut of chicken after earning massive profits when meat prices soared during the COVID-19 pandemic. The company announced the closures of six US chicken plants with nearly 4,700 employees this year to reduce costs². Its chicken business likely returned to profitability in the quarter ended Sept. 30 after two quarters of operating losses, analysts said¹.

To tighten supplies and improve margins, Tyson and other chicken producers have placed fewer eggs in incubators and chicks for meat production in recent weeks, compared to a year earlier, according to US government data¹. An index of chicken prices and feed prices that reflects profitability for poultry producers in September hit its highest level in more than a year¹.

The high chicken prices are likely to persist as feed costs remain low and consumers continue to seek affordable protein options amid rising inflation. However, some analysts warn that the poultry industry may face challenges from labor shortages, supply chain disruptions, and environmental regulations in the future².