No guarantee for chicken prices

CEO of Jamaica Broilers Group (JBG), Christopher Levy says he can not guarantee that there will be no further increase in the prices of its poultry products for the rest of this year.

The 65-year-old company is the leading poultry provider in Jamaica, responsible for popular brands such as Best Dressed Chicken, Reggae Jammin and Hi-Pro.

Jamaica Broilers last increased chicken prices by 10% in January.

Speaking on Taking Stock with Kalilah Reynolds, Levy said that supply chain issues, the Russia/Ukraine war, high inflation and currency devaluation have created the “perfect storm”.

“What we’ve seen is a tremendous run-up in [the price of] commodities, whether it’s oil, wheat, corn; those sort of basic commodities and it has a straight pass-through effect,” he said.

The CEO revealed that the company spends between US$14-15 million a month on wheat, grains and chicken feed for its daily operations. According to Levy, that is twice what they were paying last year.

“That’s gone up roughly 100%; it’s doubled in one year. It’s unbelievable what has happened,” he shared.

Levy said, unfortunately, these increases have a direct impact on pricing.

“It’s a lot of pass-through; grains move up then poultry is gonna move up, eggs are gonna move up etc,” he explained.

“The dollar devalues, and prices are gonna move up relative to the Jamaican value. So what we try to do in Jamaica is maintain a margin and that margin has been under pressure for the last few years,” he added.

Levy said that JBG is being very strategic, as they realise that the competition for the dollar of the average Jamaican is very fierce.

“The average earning of our three million people is considerably lower than the United States…and there is so much competition for that dollar that a nurse or office staff earns,” he said.

“Whether it’s taxi fare, electricity, etc. So, when you look at the spending for food it’s relatively fixed and inflexible. Therefore, you have to get very creative with how you sell your product in that market,” he added.

Despite the challenges, Levy said that the demand for chicken has remained consistent.

Jamaica Broilers reported a J$3 billion increase in net profits for the year ended April 30, 2022, a 27% increase over the previous year.

The CEO said that growth is a result of increased volume sales.

“It’s an interesting dynamic because a lot of the competing proteins, such as beef and pork, have gotten a lot more expensive than poultry,” he noted.

US prices to remain stable

On the other hand, Levy said it is a different story for its US operations.

Unlike in Jamaica, he said he is confident that the company will be able to maintain its pricing and margins for at least the next 18-24 months in that market. This is despite what he called “wild cards” such as the war in Eastern Europe and the upcoming elections in the US.

JBG’s brands are currently in five states in the US and Levy said that the company is being aggressive in its expansion efforts.

“The market in the United States is considerably much deeper than in Jamaica so the opportunities there are a little different for us,” he said. He noted that JBG is a relatively small player in the US, especially compared to brands like Tyson and Purdue.

“The opportunities for us really exist around deepening our customer relationships and building out that niche in the brand,” he said.

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Sashell Williams2024-09-03T21:40:31-05:00