Monday, October 29, 2012

Chicken board restrains price rise


I don't expect consumers to start cheering, but for the second time this fall, Chicken Farmers of Ontario is taking a smaller price increase than warranted by the cost of production formula that usually is a rigid measure that’s followed in setting prices.

The formula indicates prices should go up by 5.15 cents per kilogram, liveweight, for quota period A-114 which begins Saturday, Nov. 3, and runs to Saturday, Dec. 29.

Instead the board has authorized an increase of 4.26 cents. That puts the base price at $1.805 per kilogram.

Rising feed costs are the reason for the formula increase. The board uses a rolling average in its formula, so the peaks reached in the summer are still pushing the formula-based feed cost higher – to $472.51 per tonne, which is 21 per cent higher than at the start of the year.

Corn and soybean prices have retreated from their peaks, so there is the potential for the formula price to moderate for the beginning of next year.