As U.S. sees record chicken prices, economists say it’s unlikely to hit Canada

Some U.S. poultry producers are scaling back chicken production, driving prices higher. Canada's supply system, along with low import volumes, will likely protect consumers here.

As beef prices continue to impact people’s wallets both in Canada and the U.S., some are turning to chicken for a more affordable protein but south of the border some poultry production companies are scaling back in an effort to cut costs.

Companies like Tyson Foods and Pilgrim’s Pride could see earnings improve as a result, with Tyson even closing six chicken plants this year to reduce costs. That boost in earnings would still leave consumers’ facing an extra pinch on their wallets as prices rise due to lower production.

Chicken prices in the U.S. are already hitting record highs, according to reports, and the U.S. Department of Agriculture projects consumption of chicken is expected to exceed 100 pounds per person this year for the first time ever.

But while Americans are starting to voice concerns over the rising cost of poultry, that same stress may not be as present in Canada.

Food economist Mike von Massow, a professor in the Department of Food, Agriculture and Resource Economics at the University of Guelph, said that due to Canada’s supply management system, Canadians don’t have to be concerned of the price going through the roof even as demand rises.

“Just because all of a sudden we’re eating more chicken it’s not happening sort of at the snap,” he said. “It might be accelerating a little bit because of high food prices, and we know chicken is a more affordable protein per kilogram, but the industry has responded as that demand has changed.”

He added that unlike beef products, which have seen demand dwindle due to increased prices as a result of low supply — cattle herd numbers were at their lowest in more than 30 years in August, according to the Canadian Cattle Association — chicken production has been increasing “in lockstep” with demand.

Canada’s chicken, as von Massow noted, has not been immune to price increases overall due to ongoing inflation with fresh and frozen chicken seeing an 8.9 per cent increase year over year in August, but it was a drop from July where it saw a 14.3 per cent rise.