Home' Trinidad and Tobago Guardian : May 4th 2014 Contents and dry March weather as another reason
for the mixed trends.
Phillips said, "We are hoping by the time
the crop-time comes in September, the crop
is very good."
Cost of producing chickens
There is good reason to hope that the crop
is good, as it can lead to a decrease in grain
Phillips, who is also the director of marketing
and public relations at Arawak, said that 80
per cent of T&T's grain is imported from the
US and Canada, the other 20 per cent comes
from Brazil and Argentina.
Chicken feed, which is made largely from
corn, covers a large portion of the cost of pro-
Phillips calculates it to be around 60 per
cent while Ronnie Mohammed, vice president
of the Nutrimix Group of Companies puts it
at 70 per cent.
For both Phillips and Mohammed, the cost
of grain has a major impact on the final price
Mohammed, unlike Phillips, believes the
price of grain is currently too low for us need
to worry about changes in chicken prices. He
said because his cost of production is low,
there would be no need to increase his chicken
But Phillips said the cost of grain influences
the price of chicken in the long term while
demand influences price in the short term.
In terms of price points, Phillips described
the poultry market as "fairly competitive."
He said: "In the poultry industry, margins
are normally small and you depend on your
volumes. To maintain volumes you have to be
competitive with your price because whether
they are in the fast-food sector or the super-
market, consumers are price sensitive."
He said: "We are involved in an industry
where we cannot say we don't like the price,
we will reduce production."
This Phillips attributed to the 90 days
between hatching eggs and processing the
"For us to respond to anything in the mar-
ket---whether it is over supply or undersup-
ply---it takes 90 days.
"If our price points affect our volumes neg-
atively and we lose sales, that means our chick-
ens are going to stay on the farm. With price
of grain where it is today, it is prohibitive to
keep them on the farm; it costs too much
Phillips said that keeping chickens on the
farm creates additional cost that cannot be
recovered and will also prevent farms from
restocking as required.
"Right now, the cost of grain is going up
and the cost of chicken is going down," Phillips
He said this is the result of a surplus from
the Lenten season.
Lent is a period where local chicken con-
sumption traditionally declines.
Statistics from the Ministry of Agriculture
indicate that chicken accounts for 85 per cent
of all the meat consumed in T&T.
With a population of 1.3 million, T&T con-
sumes an estimated one million head of chick-
ens every week, according to the PATT pres-
Phillips said: "Eighty per cent is produced
locally, the other 20 per cent is imported based
on import data that we get from the USDA
He added: "There has been a big surge in
demand since about 2008. Up to 2007, we
produced all the chicken locally and we were
producing about 750,000 heads a week. We
have gone up to about 800,000 locally and
still about 200,000 is imported."
Mohammed's data puts local production at
around 775,000 head of chickens weekly.
Phillips said consumption data from 2007
would indicate that T&T's population is more
around 1.6 million as opposed to Central Sta-
tistical Office statistics that put the population
at roughly 1.3 million with little change over
the past seven years.
Phillips said: "Owing to the fact that US,
Canadian and EU consumers have a preference
for white poultry meat (chicken breast) and
wings and these products are sold at premium
prices in their domestic markets, this results
in a back-up of dark poultry meats (leg, thigh,
back and neck) in frozen warehouses in these
countries, which are then disposed of at prices
way below production costs."
He said: "As these products age in frozen
warehouses all over the US, Canada and the
EU, the prices of these less desirable products
plummet dramatically. It should also be noted
that the expiry date for poultry meat in these
countries is 180 days from date of production
after which they cannot be offered for sales
in these markets, but these products are
approved for export sale into markets like
He said T&T exports less than 2.0 per cent
of its poultry products to foreign markets.
Opportunities in sector
The PATT president said about 60 per cent
of the $1.2 billion in sales mentioned earlier,
comes from value-added products.
Portion packs, boneless chicken, seasoned
pre-packed and chicken nuggets are just a few
of the value-added products Phillips identified
as having good market potential.
T&T has four poultry suppliers that are
considered to be large processors of the chicken
meat used for value added products: Supermix
(Arawak), Nutrimix (Nutrina), Warnerville
Grain Mills (Fine Choice) and, most recently,
Large processors, according to Phillips, are
those that process 100,000 head of chickens
These processors have vertically integrated
operations comprising hatching eggs, hatchery,
broiler farming, feed supply, pluck shop, chick-
en processing and ready to eat markets.
Phillips sees the easiest entry point for entre-
preneurs interested in the poultry sector being
the areas of broiler farming or pluck-shop
He said about 40 per cent of the chicken
sold locally is sold through the pluck shop.
He said it would cost around $1 million to
set-up a conventional pen housing 22,000
chickens and approximately $2 million for an
environmentally controlled pen.
With reporting by KWAME JOSEPH
MAY 4 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG5
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Implications for local industry
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