Nuggies

Chicken prices have gone berserk on an unfortunate combo of disasters — but Americans are still splurging on the #1 meat

Thursday, June 9, 2022 by Robinhood Snacks |

Savoring the last Buffalo wing... because chicken prices have flown the coop. The latest poultry headline: private-equity firm Atlas is taking over Foster Farms, America's 10th largest chicken producer with $3B in annual sales (you've probably seen its ground meat at grocery stores). Atlas will install the ex-CEO of nugget giant Tyson to lead Foster. The deal comes as US chicken prices have surged, up a #flated 16% in April from a year before.

No one's a winner... with this chicken dinner. Chicken is the world's most popular meat by far, followed by pork and beef. But a series of events have combined to send chicken prices soaring — and worker shortages are just the tip of the iceberg.

  • An avian flu has spread through major producing regions, wiping out 38M chickens in the US alone — where the price of boneless skinless breast is up 68% this year.
  • A dire drought and Russia's war on Ukraine have strained global grain supplies (think: corn, wheat) and ballooned prices, making it hard to feed and fatten the birds.
  • Pork-pocalypse: Price-sensitive consumers might swap chicken for cheaper pork, but now an African swine fever is sweeping through global pig herds.
THE TAKEAWAY

Some markets are less price sensitive... when it comes to nutritional staples. In the US and other wealthy countries, where food represents ~1/10th of household spending, chicken demand has held steady from consumers and restaurants (think: fried-chicken-sandwich frenzy) — that’s a positive for the poultry industry. But in developing countries, where food typically accounts for a third of budgets, people are starting to have to cut out meat altogether, and some are at risk of undernourishment if they can’t swap for more affordable proteins.