‘Almost inevitable’: Your chicken dinner is set to get more expensive

The price of your roast chook dinner or a gourmet chicken burger looks primed to rise once again after Australia’s biggest poultry supplier said it would be passing on more price increases this year.

Speaking to this masthead after revealing its 2023 half-year profits had halved, Ingham’s managing director Andrew Reeves said rising feed, fuel and packaging costs had left the company with few options other than raise prices again.

“The simple answer is yes, we will have to take some more price increases over the course of the year because of the inflationary environment we’re dealing with,” he said. “It’s almost inevitable that we’ll be doing that.”

Ingham’s chief executive has flagged that chicken prices may rise yet again.Credit: iStock

Ingham’s had already raised the price of chicken by 8.5 per cent in the final six months of 2022. Further price hikes would see consumers, who are already dealing with the highest cost of living pressures in two decades, fork out more for their usual grocery shop or a meal out.

For Ross Kemp, the boss of Sydney burger chain Super Nash Brothers, this means having to absorb even more costs after seeing the price of a kilo of chicken jump from $8.50 to $12 within a year.

“The cost of everything has gone up,” Kemp told this masthead. “The biggest thing is power for us, but chicken comes a close second ... It’s gone up considerably.”

In that time, the price of Super Nash Brothers’ popular ‘sando’ has only risen from $16 to $17, though it has had to raise prices on other menu items to protect margins.

Food inflation rose by 9.2 per cent over 2022, the biggest increase since 2006. Basic pantry staples, from oils to milk, cereal, cheese, bread and eggs saw double-digit rises over the year.

Woolworths, McDonald’s and KFC have been contacted for comment.

The supply of chicken is expected to lift after Easter, but Reeves said this would “not necessarily” result in lower prices at the grocery checkout.

The managing director expressed confidence consumers would continue to absorb further price rises in the hopes that poultry represents a more affordable alternative when compared to red meat. A 500g pack of chicken mince at Woolworths costs $5.50, compared to $7 for the same amount of beef mince.

“The environment for consumers and shoppers is a challenging one with the inflationary environment,” Reeves said.

“So yes, we will be passing prices on, but it will still be the cheapest form of protein for Australian consumers, so we expect that that will still mean [chicken is] a popular choice for families who are managing a budget.”

The $1 billion chicken producer is struggling to recover from supply chain disruptions, inflationary pressures, labour issues, and challenges to its farming operations, reporting losses across earnings, net profits, and dividends. Staffing shortages contributed to a drop in the fertility levels of breeding roosters, resulting in lower poultry volumes.

Ingham’s CEO Andrew Reeves says the company is facing cost rises across the business.Credit: Louie Douvis

Ingham’s net profits of $17.2 million was a 55 per cent drop compared to the same half the previous year, while its earnings (EBITDA) of $197 million represented a 10.6 per cent slide.

The company will pay a fully franked dividend of 4.5¢ per share, a 30.8 per cent drop on dividends paid this time last year.

While net profit results undershot E&P Financial’s estimates, retail analyst Phillip Kimber noted that EBITDA was 4 per cent better than expected, signalling a lift in earnings.

“For those investors happy to look through another tough [second half], assuming feed costs remain stable (or fall further), future earnings ... would support a higher share price,” Kimber said in a note to investors.

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