Australia’s largest chicken producer Inghams has said more price rises are on the horizon as the cost of feed skyrockets and consumer spending shrinks.
The homegrown brand has chicken products stocked in supermarkets, butchers, restaurants and fast-food chains right across the country.
Speaking to shareholders at the annual meeting on Tuesday, chief executive Andrew Reeves said further prices increases are being considered.
“We remain in active discussions to secure further price increases to offset ongoing feed cost and other inflationary pressures, should this be necessary,” Mr Reeves said.
At the annual results release in August, Inghams said its spending on chicken feed alone rose more than $45m in 2022 and costs are expected to be similarly higher for the 2023 financial year.
Chicken feed typically consists of wheat and soy meal which have both had minor price falls since mid-August.
Though tight global supply – aggravated by Ukraine, Ukrainian war and poor growing conditions in the Americas – is expected to impact the cost of feed until late 2023-2024.
“Feed prices remain elevated due to tight global supply as a result of continued uncertainty surrounding production in Ukraine and related trade flows, poor growing conditions in North and South America and elevated transport costs,” Mr Reeves said.
With no end in sight for supply pressures, the company is predicting higher input costs to impact Ingham’s results for the current financial year.
Sales volumes are down for the first quarter of 2023, reflecting a softening consumer demand, Mr Reeves said.
Wholesale prices were lifted in 2022 the results of which are now being seen by the company.
“As we outlined at the fiscal 2022 result, we have achieved good price increases across our entire customer base, the benefits of which are now being seen,” Mr Reeves said.
“The significant recovery in wholesale prices that was underway in the final quarter of last financial year has also been maintained.”
Inghams shares were down 3.8 per cent at $2.56 at the start of trading on the ASX.
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