Country's poultry farmers on the verge of bankruptcy

Country's poultry farmers on the verge of bankruptcy

By Sylvia Gratia M. Nirang

JAKARTA (JP): A sharp increase in feed meal prices could see
the chicken being added to the list of endangered animals.

The chairman of the Association of Indonesian Poultry
Producers, Alie Aboebakar, said skyrocketing prices of feed meal
had forced at least 80 percent of the country's poultry farmers
to suspend operations.

"It will certainly drain the supply of chicken meat and eggs
because small and medium-scale farms alone were supplying the
market with over 15 million chickens per month," Alie said.

He said big poultry farms, about 20 percent of the country's
poultry farms, produced only about three million chickens per
month, far below the monthly domestic consumption of 15 million
chickens.

A shortage of chicken meat and eggs could not be dealt with by
importing from other countries, not only because local demand
would be too high but also due to the high cost of imported
products, Alie said.

He said that with a conversion rate of Rp 10,000 per U.S
dollar, the price of imported chicken meat could reach Rp 15,000
to Rp 20,000 per kilogram because imported chicken costs US$1.20
a kilo excluding transportation costs and import duty.

The price of local chicken still hovers between Rp 3,700 and
Rp 4,000 per kilogram as supply remains relatively stable due to
"dumping" measures by ailing poultry farms.

Many poultry companies have been forced to sell all their
chickens before the chickens were matured enough to slaughter.

Over the next few months, small and medium-scale poultry farms
will cease all farming activities. This is expected to cause
prices to increase to over Rp 10,000 per kilogram.

Antara reported that in many producing areas, farmers had
ceased operations owing to the unrealistic increase in feed meal
prices which rendered the poultry business no longer feasible.

Farmers in Kotawaringin Barat regency of Central Kalimantan
who produce broilers closed down this month.

In Tasikmalaya, West Java, many chickens died because the
farmers only gave them bran to eat, the news agency reported.

The association's secretary-general, Heru Ananto, said at
least 50 medium and large poultry farms had closed since December
due to the sharp increase in feed meal prices.

Heru said the supply of chicken meat had dropped 50 percent
since early this year due to the closing of poultry farms.

He said increased prices, triggered by the currency crisis,
had significantly reduced poultry farmers' incomes because a rise
in the price of eggs and meat did not follow.

The price of processed fodder has increased by about 100
percent to about Rp 2,000 per kilogram since the monetary crisis
first hit the country in July.

He said the sharp fluctuation of feed meal prices also brought
further uncertainty to the poultry business.

"The price of processed fodder last week was Rp 1,900 a kilo.
It was Rp 1,500 two weeks ago and Rp 1,300 in December. This has
never happened before," he said, adding that the increase makes
production costs of day-old chickens exceed a farmer's income
from selling one kilogram of chicken meat.

Heru said the increase in feed meal was caused by price
increases in raw materials, such as corn, wheat pollard, fish
powder and premix concentrate.

He said the price of premix concentrate, a protein-rich
mixture of materials which make up between 30 percent and 35
percent of the fodder, has jumped 53.16 percent to Rp 5,600 per
kilogram from Rp 3,600 last year.

He said corn, which makes up over 40 percent of the fodder,
presently costs poultry farmers about Rp 900 (7 U.S cents) per
kilogram, an increase of over 70 percent from its January 1997
price.

He said fish powder prices rose 54.66 percent from January
last year to Rp 2,900, and wheat pollard was now Rp 400, 17
percent more than last year.

Bran, another feed meal ingredient, has increased 65.38
percent to Rp 430, he said.

He said the highest producer price of chicken meat had reached
Rp 2,800 per kilogram. With a fodder price of Rp 1,900 per kg,
farmers could only break even at Rp 4,700 per kg.

"With a calculation of the break-even point, minus selling
price, times 54 million kilograms local consumption per month,
farmers have suffered an estimated loss of about Rp 102.6 billion
per month per kilogram of chicken meat," he said.

Most chicken farmers have been forced to sell off all their
breeders to minimize losses and to buy feed for chicks.

In Bogor and Sukabumi, farmers reportedly were forced to sell
their chickens for Rp 1,000 per kilogram because they could no
longer afford to buy animal feed.

"I was forced to sell off my 10,000 chickens for only Rp 1,500
per kilogram. I could not continue my business because the
production costs are almost triple the selling price," Niniek, a
farmer in Sukabumi, told The Jakarta Post.

Her poultry farm used to produce 1.7 tons of eggs per day and
5,500 chickens daily. For the past two months, she has suffered a
loss of about Rp 1 million daily.

She added that she was forced to give her day-old chickens to
people in nearby villages because she could not afford to keep
them.

"Every day we have to feed the chickens and every day the
price of fodder gets higher," she said, also claiming that feed
suppliers always said there was no stock available.

In Jakarta, it was reported that at least 20 poultry farms had
closed over the past five months. Most of the farms were located
in Cibubur, East Jakarta, and in Ciganjur, South Jakarta.