‘Headwinds’: Aussie favourite you’ll pay more to eat

The country’s biggest poultry producer has hinted customers will soon pay more for chicken dinners as the cost of doing business spirals.

The country’s biggest poultry producer has warned further price rises could be on the way, as inflation and the cost-of-living crisis hike up the costs of an Aussie dinner favourite.

Ingham’s, like many other Aussie businesses, has faced endless pressures since the beginning of the Covid pandemic, with costs of essentials like feed, labour, fuel and packaging skyrocketing.

The company said the price of chicken feed alone had increased by 29.6 per cent and freight costs had ballooned by an extra $28.2m.

The poultry producer is now warning that ongoing costs will likely be passed onto customers, just months after sharing the cost of chicken feed went up $45m over the past year.

Ingham’s said it expected prices to be similarly higher for the 2023 financial year, as global supply continues to be aggravated by the crisis in Ukraine as well as poor feed-growing conditions in the US.

On Friday, Ingham’s revealed core poultry sales had fallen 0.6 per cent since the last financial year due to Covid and a decline in farming performance across Australia.

The price of a chicken dinner is set to rise.

“Healthy growth in poultry demand is being seen as consumer activity returns to pre-Covid patterns, which combined with an industry-wide reduction in the volume of chicken available for sale during the last six months has underpinned a favourable pricing environment as reflected in the growth in average selling prices during the period,” a release from Ingham’s read.

Ingham’s managing director and chief executive Andrew Reeves said farming operations were taking longer to return to normal levels.

“While it is clear the business is successfully transitioning from the various operational challenges experienced over the past 12 months, our farming operations are taking longer to return to normal levels, resulting in lower than required poultry volumes.

“We also continue to manage a number of general market headwinds, including supply chain disruptions and broad inflationary pressures that are a feature of the current operating environment.

Ingham’s farming operations are taking longer to return to normal.

“Overall, the poultry sector remains attractive, underpinned by strong demand with key long-term trends intact. Our underlying business is in good shape, and our diverse network and market-leading integrated operating model provide a strong platform for future growth.”

Ingham’s said the company remained focused on ensuring customer pricing levels reflected ongoing costs and would “pass on further price increases as required”.

“The poultry sector remains a growing sector, holding a significant and growing affordability advantage over red meat and seafood alternatives, which is particularly attractive in the current inflationary environment. Importantly, ongoing discussions with key customers highlights their strategic focus on the poultry segment, reaffirming our optimism for the category over the medium to longer term,” the release said.

Originally published as ‘Headwinds’: Aussie favourite you’ll pay more to eat