When was the last time the price went down for any product?
In this era of inflation, consumers are seeing more of their paycheck and nest egg quickly eaten up by daily purchases. According to the U.S. Bureau of Labor Statistics’ Consumer Price Index Inflation Calculator, the strength of a shopper’s dollar fell by 8.2% between September 2021 and September 2022. The same metric shows the dollar is about 28% weaker than in September 2012.
Despite the price of food, people need to eat. History shows when times are tough, people cut back on spending. This often benefits the chicken industry due to its consistently lower cost in comparison to other proteins.
The timing could prove fortuitous for the industry, too. After a decade of rapid expansion to meet high demand, the industry finds itself in a scenario where prices are quickly dropping.
After reaching an all-time high in May 2022 at about about $3.50 per pound, spot wholesale prices for boneless, skinless breast meat prices crashed. In October 2022, prices fell to to less than $1 per pound.
This price collapse is due to demand falling sharply and the greater availability of chicken. Integrators were busy building new facilities in past years, so production has continued to ramp up, too. After starting the year on track for a record profit, the chicken industry is now facing the potential for losses.
Perhaps thrifty Americans will boost the flagging demand for poultry to close 2022 and open 2023. They will need some help from retailers, though. Shoppers paid a record – Bob Barker and Drew Carey shocking – average retail price of $4.75 per pound in September 2022. At the same time in 2021, they paid $3.52 per pound.
If the price for chicken drops, I'd wager it will sell. It’s up to the retailers, most enjoying profitable times, to match the retail price to the new, lower wholesale price.