Poultry producers overrun by chicken
Published:Wednesday | June 3, 2020 | 12:15 AMKarena Bennett/Business Reporter
Big poultry companies Jamaica Broilers Group and Caribbean Broilers say they are likely to still be holding record-high inventory of chickens for the next six months.
That might have been good news in normal times for a country that favours poultry meat, but with demand decimated during the COVID-19 pandemic, it means the companies are uncertain they will be able to sell off enough of the supplies to deplete the stock, even amid the phased reopening of the economy, which started Monday.
The companies are especially dependent on the food services and tourism markets for sales.
The producers, who have both reported an average 40 per cent decline in chicken sales since the virus entered Jamaica in March, have been forced to cut production levels and have also turned to external storage space in an attempt to stem losses.
“I don’t think the industry has ever had this amount of chicken, quite frankly. The small farmers’ freezers are full, our freezers are full, and as far I know, the competition’s freezers are full,” Senior Vice-President of Operations and Finance at Jamaica Broilers, Ian Parsard, told the Financial Gleaner.
Parsard said it would take a doubling or tripling of demand for poultry over the next six months before operations at the country’s poultry producers begin to normalise.
The sector is pinning some of their hope on the recent announcement by the Ministry of Industry, Commerce, Agriculture and Fisheries to temporary suspend the import of agricultural goods to safeguard markets for locally produced goods, including chicken.
Jamaica’s reopening of the economy on June 1 and the announced opening of the borders to international guests, scheduled for June 15, will also start the recovery process for the country’s hotel and restaurant industries – both of which stand as major markets for poultry producers.
“We’re carrying more inventory than we ever have and we do need a lot of help in reducing that inventory. Unless the economy rebounds and consumption increases dramatically, we’re projecting about four to six months of high stock levels,” Head of Marketing and Regional Development for CB Group, Alicia Bogues, told the Financial Gleaner.
Last month, CB Group kick-started its strategy to lower inventory levels through its Recover Together initiative. It’s geared at assisting more than 2,000 restaurants, cook shops and food establishments get back on their feet through marketing support, flexible credit terms and product discounts.
In the interim, both Jamaica Broilers and Caribbean Broilers have been renting external cold storage from multiple suppliers, which according to Parsard, have space to spare due to the fallouts in business induced by the coronavirus.
For Jamaica Broilers normal inventory ranges from one million to two million kilogrammes at any one point in time.
As to what would be done with poultry that they are unable to find markets for immediately, Parsard said: “We will rotate the stock ... sell what was produced first, so there should be no issue with expiration.”
Neither Parsard nor Bogues named their suppliers of storage space.
The Government of Jamaica is also in the market for storage, and has been touring various warehousing facilities, looking for space for excess fruits, vegetables and meats under a programme meant to assist farmers and producers find markets for excess agricultural products.
Last month, Richard Lake and Lisa Hanna, the directors of St Ann-based agriculture and food-processing facility Lydford Logistics, indicated they were willing to provide cold storage space at their facility to the Ministry of Industry, Commerce, Agriculture and Fisheries.
Efforts to get a comment on whether the parties had struck a commercial arrangement following a tour of the Lydford Logistics facility by State Minister Floyd Green were unsuccessful.