Egg, Chicken Price Slump Spurs Push for Processing Industry
Egg, Chicken Price Slump Spurs Push for Processing Industry
Jakarta. Indonesia’s surplus production of eggs and chicken meat is driving down farm-gate prices, prompting calls for greater downstream industrial processing to absorb excess supply and protect poultry farmers.
Industrialization in the poultry sector could offer a medium- to long-term solution to falling prices, according to Abra Talattov, head of the Center of Food, Energy, and Sustainable Development at the Institute for Development of Economics and Finance (Indef).
President Prabowo Subianto has said Indonesia has achieved self-sufficiency in eight commodities, including eggs and chicken meat. But the abundance of supply has created a new problem: prices at the producer level have fallen sharply.
“Eggs and chicken meat, as President Prabowo has claimed, are indeed self-sufficient, meaning that production is abundant. Consumers benefit from this, but farmers are facing plunging prices,” Abra said at a recent Indef public discussion on the president’s state address and the 2027 state budget financial note.
Abra said the government needed to improve supply redistribution from surplus-producing areas to regions facing shortages while strengthening stock management.
“One other key word is stock management. This includes downstream processing or industrialization in the livestock sector,” he said.
Under this approach, excess eggs and chicken meat could be absorbed by industrialization and processed into finished or semi-finished products rather than being released entirely into the fresh market when supply is abundant. The products could then be stored and used when supplies tighten.
The same model could also apply to other agricultural commodities, Abra said, particularly perishable products such as chili and onions that often see prices collapse during harvest seasons.
“Through industry, the government can process agricultural and livestock commodities when there is an excessive surplus during the harvest period. The products can then be stored and used later when we are facing a deficit or a lean season,” Abra said.
In the short term, however, he said the government could support farm-gate prices by increasing absorption through the MBG Kitchens (SPPG), the Red and White Village and Urban Cooperatives (KDMP), and by redistributing supplies from surplus regions to deficit areas.
The Presidential Staff Office (KSP) has also flagged falling egg prices, which have dropped below the government’s farm-gate reference price.
The average price of chicken eggs stood at Rp 26,215 ($1.48) per kilogram, down from Rp 26,353 a week earlier, according to KSP Deputy Chief of Staff Popy Rufaidah.
“Chicken egg prices remain below the farm-gate reference price and have fallen again from last week, putting pressure on farmers. The price disparity is high at 27.39%, placing the situation in the unsafe zone,” Popy said during a regional inflation control meeting on Aug. 24.
Popy said food price management should take into account both commodities and regional conditions. When prices fall too low, the focus should shift toward absorbing production and protecting the sustainability of farmers and livestock businesses.
For eggs, KSP recommended stronger government absorption, including through cooperation between regions to move supplies from low-price areas to regions where prices are higher, as well as greater coordination with SPPG under the National Nutrition Agency (BGN).
The same inflation control meeting also highlighted rising rice prices, with Statistics Indonesia (BPS) warning that increases had spread to more regions.
BPS Director of Price Statistics Sarpono said rice and cooking oil were among the commodities requiring closer attention, although price movements for most food products remained relatively low.
“Rice and cooking oil are the commodities we need to watch. Rice prices increased in more than 132 regions, compared with 120 regions in the previous week, and this requires serious attention because the impact on inflation and household purchasing power is much greater than that of other commodities,” Sarpono said.
As of the third week of August, the average price of medium-grade rice had risen 0.27% from July to Rp 14,520 per kilogram, while premium rice prices increased 0.23% to Rp 16,368 per kilogram.
State food procurement agency Bulog said it had stepped up market intervention through its Food Supply and Price Stabilization (SPHP) program in regions experiencing price increases.
As of Aug. 23, SPHP rice distribution had reached 687,951 tons, or 83.09% of the target, with daily distribution averaging between 7,000 and 8,000 tons.
“Average SPHP rice distribution this August has reached 7,000 to 8,000 tons per day, compared with only 3,000 to 4,000 tons previously. We continue supplying rice to traditional markets,” said Muhammad Wawan Hidayanto, Bulog’s head of operations planning and market price analysis.
Bulog said regions where distribution targets had been met would continue to receive support, while areas with low distribution and rising prices would be prioritized for monitoring and intervention to maintain supply and price stability.
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