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Business

Prioritize struggling broiler industry, firms urge Marcos

The Philippine Star

MANILA, Philippines — Stakeholders in the local broiler industry are hoping that President Marcos, who will also take the helm at the Department of Agriculture, will move to prioritize the sector amid various challenges.

The broiler industry is not spared from global supply chain issues that have pushed prices to record highs and shows no sign yet of slowing down.

American Chamber of Commerce agribusiness committee chairman Christopher Ilagan said the lowering of corn tariff was a right move in the short term as the country remains a net importer of the requirements needed in the livestock and broiler industry.

The government earlier reduced the duty for corn to support the production of large-scale broiler and swine farms.  However, the government could have urgently increased the minimum access volume as there remains a deficit for the feed requirement of the sectors, Ilagan said.

Over the long-term, the Marcos administration is urged to update laws to allow tariff revenue to be earmarked for development of input sectors like corn to improve their productivity and efficiency.

Vitarich Corp., one of the country’s pioneers in broiler and feed manufacturing, said the incoming government must move to fully support the value chain, find ways to keep input costs low and use whatever proceeds from taxes and tariffs to assist local farmers.

Vitarich legal counsel Karen Jimeno has recommended that the country increase its food security measures to prevent the entry of unsafe and infected meat, stamp out smuggling and increase the budget for assisting local producers in the value chain.

“We support the new administration’s goal toward food security.  Sustainable local biosecurity equals national food security,” Jimeno said.

Latest market monitoring showed that the price of whole chicken is at P200 per kilo, higher by P20 from a month ago. At the start of the year, it was only priced at P160 a kilo.

The government earlier explained that more expensive chicken is due to lower supply as an effect of higher oil and input prices plus the additional demand from pork substitution.

“Some players cut back on production. The recent surge in prices of pork also resulted in some degree of substitution in favor of the relatively lower priced chicken,” said Ronald Mascariñas, president of Bounty Agro Ventures Inc., the company behind the Chooks to Go brand.

He noted that while there is enough frozen inventory in cold storage facilities, the market preference is for fresh chilled chicken.

For his part, Ilagan said the higher mobility of people has contributed to the increased demand of chicken products, while breeder placements may have been more conservative on the run-up to the higher demand given the COVID experience where demand dropped quite substantially.

“The higher feed costs lately may have also impacted profitability at the farm level, which may have affected decisions of some broiler growers to lower production levels,” he said.

Apart from soaring commodity prices, the industry is also facing logistics hurdles because of restrictions and additional requirements imposed by various local government units to protect their areas from bird flu.

There are also new requirements such as bird flu tests needed before they are allowed to move. This has restricted the movement of eggs to hatcheries for the supply of day-old chicks to the farms. The same restrictions apply to live and dressed chicken.

“The overreaction of some LGUs is compounding the balancing of supply across the country,” Mascariñas said.

Jimeno suggested that the government should streamline requirements among LGUs and make them uniform at the national level to improve the situation.

As to whether prices will remain elevated for the rest of the year, Mascariñas maintained that it is not easy to read that since it is uncertain how many new breeders are on the ground that will contribute to additional production every month.

He added that the supply of imported breeders was also disrupted due to the global outbreak of bird flu which led to the imposition of an import ban across many source countries.

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