Now even chicken is getting too expensive?

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What do you get when three pandemics coincide with a drought? The most expensive chicken we’ve seen in years.

The prices of the most consumed meat in the world have soared in recent months. Whole chickens retailed in the United States cost $1.79 a pound in April, the highest price in 15 years of record highs and about 19% higher than their 10-year average. In Thailand, the fourth-largest exporter after the United States, Brazil and the European Union, similar birds were selling for 62.50 baht ($1.82) per kilogram last week, an increase of one-third in six month. Wholesale frozen chickens in Brazil cost 10.21 reais ($2.12) a kilo on May 19, more than double their 10-year average.

This resulted in shocking upheavals. Malaysia said this week it would halt meat exports by the end of this month to ensure it had sufficient domestic supplies. This has caused some concern in land-poor Singapore, which regards Hainanese chicken rice as its national dish and depends on its neighbor for its supply of fresh birds. Taiwan went the other way last month, easing quarantine restrictions on poultry to increase imports from the United States.

In the United States, portions of chicken wings cost twice what they cost a few years ago, while the British supermarket chain Co-operative Group Ltd. warned that meat could soon become as expensive as beef. Stocks of poultry producers such as Pilgrim’s Pride Corp. and Tyson Foods Inc. surged.

The cause of all this chaos was a veritable cavalry charge of apocalyptic horsemen. Three separate pandemics are squeezing white meat. A variant of bird flu that rarely infects humans but is devastating to flocks has swept through major growing regions. The result was mass culling as farmers struggled to stop the spread. In the United States alone, more than 38 million chickens have been killed since early February. In France, one in 20 birds has been shot. Of the world’s major poultry producers, only Brazil and China have remained immune so far.

In normal times, the impact would be muted as consumers turn to alternatives – but a second pandemic, African swine fever, continues to sweep through the world’s pig herds, particularly in Asian countries where pork is a substitute especially common from chicken. As a result, this alternative does not play its usual role as a safety valve to reduce the pressure on poultry when demand for animal protein begins to exceed supply.

As if that weren’t enough, there’s our own pandemic to consider. Chicken is a particularly popular meat for fast food and restaurants, with about half of poultry in the United States being cooked outside the home. During the two years of Covid-19, this part of the market went into a prolonged slump, helping to push US retail prices to their lowest level in eight years at the start of 2020.

As the world returns to normal, however, resurgent demand is clashing with an industry that has adapted to more constrained Covid-era consumption levels. The chicken market can rebalance with remarkable speed – chicks can be raised to slaughter weight in just over a month, compared to six months for pigs and over a year for cattle – but it would still take time to rebuild herds to normal levels, even if bird flu were not a factor.

As if all this were not enough, we must also take into account the impact of drought. The cost of chicken is so closely tied to the grains used to fatten broilers that analysts often study price-to-feed ratios, which estimate meat as a mathematical product of corn and soybean prices in the same way as margins. oil refiners are stylized as the split between crude and major products.

Maize, the most important feed grain, hit a 10-year high in April and costs about double what it cost for most of the 2010s. The La Nina climate cycle, which typically brings dry conditions and low crop yields in corn growing areas of the US Midwest and South America, is now entering its third consecutive year. US soybeans also tend to suffer during La Nina cycles, although tropical crops in Brazil fare somewhat better.

In rich countries, people can generally accept this without flinching. Increases in the price of chicken do not reduce income as much as the cost of fuel, and in places where food accounts for around 10% of expenses, it is not difficult to shell out a little more. Where nutrition represents a third or more of the household budget, as in developing countries in Asia and Africa, people will have no choice but to go without. Even in relatively wealthy Brazil, consumers who in recent years have switched from beef to chicken are now cutting meat out altogether or replacing it with eggs or pork, as years of recession and inflation cut into their incomes. .

While the world needs to reduce its meat consumption, that is no cause for celebration. Protein is still an essential part of a balanced diet – and the wealthy will have little trouble affording it, this year and next. However, in poor countries most at risk of undernourishment, an essential source of nutrition and enjoyment is slowly slipping out of reach.

More from Bloomberg Opinion:

The global hunger safety net is more fragile than you think: David Fickling

America may have had its fill of chicken wings: Justin Fox

Soaring food prices can pay for a safer future: Amanda Little

(Delete reference to broilers in fifth paragraph and table.)

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering energy and commodities. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

More stories like this are available at bloomberg.com/opinion