Chicken Meat, Egg Surplus Becomes Challenge

KOMPAS/RONY ARIYANTO NUGROHO

Farhan (19) goes around checking feed in one of the laying hen farm cages in Totogan Village, Pakansari, Cibinong, Bogor Regency, Monday (11/5/2020).

JAKARTA, KOMPAS — The government and national poultry players are facing the challenge of handling a surplus in national chicken meat and egg production this year. Without the right solution, the surplus will hit broiler or laying chicken breeders again, especially because prices have dropped below the cost of production.

Chairman of the Association of Poultry Breeding Companies Achmad Dawami said the supply of eggs and chicken meat had the potential to be excessive in 2021. Based on data from the Coordinating Economic Ministry, the production of purebred chicken is estimated to be 3.97 million tons, while the national demand is 3.19 million tons. This means that the excess production of purebred chicken is expected to be 771,373 tons this year.

What will the strategy of balancing the supply and demand look like? Should there be culling again?

Meanwhile, the excess production of chicken eggs is predicted to reach 32,261 tons because the production is predicted at 5.09 million tons, while the national demand is 5.06 million tons.

"What will the strategy of balancing the supply and demand look like? Should there be culling again?" Dawami said during an online discussion titled “Evidence-Based Policy in the Poultry Industry” held by the Indonesian Academy of Sciences, the Center for Food Agriculture and Advocacy Studies (Pataka) and IPB University on Tuesday (26/1/2021).

Also read: Chicken Productivity Not the Only Problem

According to Dawami, the government should not only monitor production but should also try to boost the consumption of eggs and chicken meat. This can be done, among others, by absorbing eggs and chicken meat produced by domestic breeders into COVID-19 social assistance programs.

The impact of the excess supply has been felt by laying poultry farmers. President of the National Layer Breeders Association Ki Musbar Mesdi said that Jakarta and West Java constituted 60 percent of the national market for eggs from national breeders. The pandemic has depressed demand from the two provinces, thereby pushing down prices at the farmer level. "Our stock is stuck and can\'t get out for the next three or four days. Sometimes we have to throw away the eggs we produce," he said.

KOMPAS/TOTOK WIJAYANTO

Representatives of independent smallholder poultry breeders rallied in front of the Merdeka Palace, Central Jakarta, Tuesday (5/3/2019). They asked the government to protect breeders so that the price of chickens would not continue to decline.

Muladno, a professor of animal husbandry at IPB University, said messy data was an ongoing problem. Different government agencies have different versions of the data. As a result, excess production is not fully addressed. It is not uncommon for breeders to protest the government-set selling price for being too low.

In addition to data that is accurate, transparent and reflects the current situation, efforts to build the national poultry industry also require solid cooperation between ministries and state institutions. Muladno said the problem of overproduction could not be solved solely by the Agriculture Ministry on the production side or the Trade Ministry on the trade side.

Also read: Controlling Food Prices

Over the last two years, the selling prices of chicken meat and eggs at the farmer level have fallen repeatedly. From March to April 2020, for example, the price of live chickens dropped by Rp 4,500 to Rp 5,000 per kg. Meanwhile, the production cost reached Rp 18,000 per kg. Trade Ministerial Regulation (Permendag) No. 7/2020 sets a reference price for chickens at the farmer level of Rp 19,000 to Rp 21,000 per kg.

An important effort to handle the production surplus is boosting national consumption. Dawami said that so far, government intervention to stabilize prices had been pursued by controlling production by cutting off hatched eggs and early culling, among other methods.

In fact, efforts to increase the consumption of chicken meat and eggs by the people are no less important. The Statistics Indonesia (BPS), in its staple food consumption survey, estimated that the nation’s chicken meat consumption in 2019 would be 12.13 kg per capita yearly.

KOMPAS/TOTOK WIJAYANTO

Traders serve buyers of eggs at Jatinegara Market, Jakarta, Tuesday (26/1/2021). Currently, the price of eggs is starting to fall. In this market, traders sell them at an average price of Rp. 23,000 per kg from the original Rp. 30,000.

Taking control of production

With regard to fluctuations in poultry prices, the Agriculture Ministry has repeatedly issued circular letters to control production. From Aug. 26, 2020, to January 2021, the Directorate General of Animal Husbandry and Animal Health issued six circular letters of production cuts to stabilize prices.

Director general of animal husbandry and animal health Nasrullah, in a written statement released on Tuesday (26/1), said efforts to control production had shown positive results. According to reports by market information officers, the national live chicken price increased by an average of 9.45 percent from September 2020 to January 2021. At the farmer level, the price gradually increased from Rp 17,124 per kg in September to Rp 20,200 per kg in the third week of January.

Also read: Breeders Suffer amid Sharp Fall in Egg Prices

Nasrullah said that the increase in the price of live chickens in accordance with the reference price as regulated in Permendag Number 7/2020 had an effect on the increase in demand for day-old chick final stock (DOC FS). The price of each DOC FS has also increased from Rp 5,000 to Rp 7,000.

In order to protect the interests of micro, small and medium sized breeders, he said, each breeding company had been asked to prioritize the distribution of 50 percent of its DOC FS production for small-scale breeders according to the reference price, namely Rp 5,500 to Rp 6,000 each.

Agriculture Minister Syahrul Yasin Limpo added that the government was fixing the national poultry sector to improve the welfare of small breeders. He expected input, proposals, suggestions, criticism and assistance in community supervision so that the target of stabilizing and improving farmer welfare could be achieved.

This article was translated by Hyginus Hardoyo.