The Malaysian Insight

PUTRAJAYA must increase the wholesale price of chicken or risk further supply disruption as farmers cut back on operations, the group said.

Poultry farmers told The Malaysian Insight that with the current ceiling price of RM5.60 per kg for wholesale chicken, farmers are losing RM1 for every kg sold.

This comes up to almost RM200 million in losses on a monthly basis, leading many poultry farmers to pivot to other businesses to make ends meet.

Jeffery Ng, the former adviser for the Federation of Breeders Associations of Malaysia (FLAM), said the farmers’ concerns have fallen on deaf ears.

“The government is asking us to sell more chickens to make profits but we are losing money due to the high cost of feed,” Ng told The Malaysian Insight.

“I don’t understand what kind of mathematics this is. If you are a manufacturer, your input cost goes up but your selling price goes down, so what kind of calculation is that?

“When you add it all together, it (profit) becomes negative. They (the government) are basically asking us to close shop,” Ng said, adding that the poultry industry at the farm level is worth more than RM10 billion.

The wholesale price of chicken was set at RM6.20 per kg during the Deepavali festive period. It was subsequently reduced to RM6.10 per kg during Christmas and for Chinese New Year prices came down even more to RM5.60 per kg.

A whole standard chicken currently retails at RM8.90 per kg, 20 sen cheaper than the RM9.10 fixed ceiling price. This price was set by the National Council of Cost of Living and will last until June 5.

Poultry prices have skyrocketed in recent months due to the cost of feed, which has gone up by more than 30%.

A bag of 50kg feed used to cost RM100 but now costs RM130.

This is expected to increase further next month, Ng said.

Feed prices have also impacted the price of eggs. The Malaysian Family Maximum Price Scheme, in force from February 5 to June 5, set the maximum retail price of eggs in peninsula at 44 sen (Grade A), 42 sen (Grade B) and 40 sen (Grade C), while the prices in Sabah, Sarawak and Labuan depend on the area.

FLAM said the higher cost of feed may force producers of egg-laying chickens to reduce livestock and cut costs, which will ultimately lead to more shortage in the market.

The association represents 15 poultry and egg farmers nationwide.

“In Taiwan, the price of eggs has shot up to 88 Taiwan dollars per kg and people have to queue up very early in the morning.

“People there don’t mind paying more as long as they get the eggs. Here, they (consumers) only want cheap (eggs).

Farmers are expendable

Ng said while the government is trying to lower the cost of living by controlling the price of goods, they are doing it at the cost of struggling farmers.

“We told the government if the chicken price is too high, it is also not good for farmers because people buy less. Then we are not able to sell what we produce.

“But if you fix too low, it will jeopardise us. We asked them to give us RM6.60 per kg so some people can still make a living. At least we will not be in the red.

“Every single kg I sell, I lose RM1. The more I sell, the more I lose,” Ng, who owns a farm in Malacca, said.

Given the current situation, many poultry farmers have decided to either close shop for good or start other businesses to make ends meet.

“Every farmer has a decision to make on what to do next. Some of us have decided to sell fruits and become vegetable farmers. They’re running out of funds.

“Some of them have even decided to retire early. Whatever money they have collected, they cannot continue. This is their retirement fund after 30 years in the industry.”

Smaller farms in Kelantan and Terengganu have closed down as the government squeezes into producers’ profit margin, Ng said.

Ng too is wondering how much longer he can sustain himself.

“I will continue as long as the bank supports me, but how long will they support a business that is losing money?

“I will look at the numbers and see what to do next. I might have to downsize or pivot to other businesses.”

Importing chicken not the way forward

Ng, meanwhile, scoffed at the government’s decision to import chicken to make up for the shortfall in the market.

“As farmers we are very proud of what we do feeding the people and we have invested in technology to make farming better.

“But when the government squeezes our profit margins, how can we improve farming techniques and help feed the people?

“Maintaining low chicken prices is not food security.”

Agriculture and Food Industries Minister Ronald Kiandee said 32 companies from Thailand, China and Brazil have been given approval to export frozen whole chicken to Malaysia to overcome the shortage.

Ng also said Malaysians are accustomed to eating fresh chicken and may not take to the frozen variety.

“The whole country may have to eat imported chicken but what is the quality?

“Do bear in mind that US chicken prices went up by 25% because of corn prices. On top of that there is the logistic cost that went up five- to 10-fold.

“So, is this an option?” he asked. – February 9, 2022.