The rapid growth of world population requirement of quality and quantity assurance in food supply, need for protein of animal origin, increasing consumer awareness and preferences in terms of healthy and balanced nutrition have brought the broiler sector to the situation of a large industry having a significant place in rural and national economy in Turkey as in many countries.
Despite factors such as the demand reduction and sudden drops in chicken meat
prices due to causes economic crises experienced in Turkey, various sensational
comments, Highly Pathogenic Avian Influenza (HPAI) outbreaks etc., broiler production
has made significant progress in recent years in quality, productivity and capacity
(BESD-BIR, 2006). Herein, factors such as using high-yield
broiler parent stock, modernization of poultry farms and slaughterhouses, investment
and employment level, production industry integration, increasing consumer demand,
advance in sales and marketing organization, export potential have acted. The
major problem in broiler sector is dependence on external resources in the supply
of parent stock, feed raw materials (especially corn and soybean), vaccines-medicines,
feed additives to a certain extent and this situation affects the competition
of the sector in foreign markets adversely as a result of increasing production
costs (Cicek and Tandogan, 2007).
Many factors affect chicken meat prices such as input costs (feed, chick etc.), income level, purchasing power and consumption choices of the consumer, substitute product prices, economic conjuncture and external trade.
Chicken meat prices in Turkey are influenced rapidly from seasonal and periodic
demand variations and instability in markets due to speculations and epidemics.
The aim of this study was to determine the effects of factors such as the economic
crisis, some speculative comments related to broiler sector (hormone usage,
antibiotic residual, etc.) and HPAI outbreaks on the chicken meat prices and
to identify the variations and seasonal price fluctuations between chicken meat
and feed prices that occurred in Turkey in 1994-2006 period.
MATERIALS AND METHODS
The main material of this research is whole chicken and broiler feed retail prices that formed in the Turkish poultry market in 1994-2006 period. In the study, monthly average chicken meat and feed prices obtained from TÜİK and BESD-BİR were used to examine the interactions and variations according to time in the prices. The current prices were converted to real prices using Consumer Price Index (CPI) in order to eliminate the impact of inflation on the price data in the same period.
On the other hand, the seasonal fluctuations in whole chicken prices were determined by a seasonal index prepared with monthly average prices between 1994 and 2006. The months having values over 100 in the index were assessed as these are higher than the general average on an annual basis. In addition, a correlation analysis was performed to investigate the relationship between chicken meat and feed prices.
RESULTS AND DISCUSSION
Broiler sector has shown a rapid development course in Turkey in the last 15
years (excluding 1994 and 2001 economic crisis years) and has experienced a
temporary recession period in 2005-2006. Chicken meat production quantity, annual
average whole chicken meat and feed prices in Turkey are shown in Table
1. It was observed that annual average growth rate of broiler sector was
13.5% in Turkey in 1994-2006 period but the development was not linear due to
various socio-economic problems experienced by the sector stakeholders. As a
matter of fact, the shift in consumer demand to the white meat because of BSE
(Bovine Spongiform Encephalopathy) disease emerged in 1996 following the economic
crisis of 1994 provided the sector to pick up. Furthermore, it was determined
that chicken meat production decreased by 10.5% due to the economic crisis of
2001 according to the previous year.
On the other hand, as a result of some speculative comments related to hormone usage at the end of 2004, HPAI outbreaks and the crisis in the Turkish poultry sector in 2005, a pause in chicken meat production increase and reduction in prices occurred in 2005-2006.
In the research, it was determined that the average current prices of the chicken
meat and feed increased by approximately 55.4 and 53.1 times. However, their
real prices decreased by 30.1 and 32.9% between 1994 and 2006, respectively.
Chicken meat price has increased by 110.7 and 54.5%, respectively compared to
the previous year due to the decrease in broiler production in 1998 and 2001.
Furthermore, it was found that the speculative comments about hormone and antibiotic
residuals in chicken meat in November 2004 dropped the chicken meat price 14.8%
in next month. Whole chicken price reached its highest value in 1998 when production
trend decelerated due to technical reasons (Fig. 1).
In addition, the HPAI outbreaks occurred in October and December 2005 in Turkey caused panic among people and turned into a virtual crisis. The chicken meat prices in the market was determined to drop 15.5% in the October crisis and 26.4% in the December crisis based on September 2005 price.
When the variation in whole chicken and feed prices are analyzed, the result
of realized model estimation is in cubic form and the function and determination
coefficient of the equation for the chicken meat has been found as Y = 27.71x3
- 630.25x2 + 2261.5x + 59023; R2 = 0.7329 (73.3%).
||The chicken meat production, whole chicken and broiler feed
current prices in Turkey (1994-2006)
||Variation in chicken meat and feed real prices in Turkey (1994-2006)
||The seasonal course of monthly average real whole chicken
Moreover, model assumption and determination coefficient of the equation for
feed it has been calculated as Y = 1.2688x3 - 46.845x2
+ 202.82x + 9038.3; R2 = 0.7134 (71.3%).
A correlation analysis was performed with the aim of determining the level
of relation between real whole chicken prices and feed prices in 1994-2006 period
and the correlation coefficient was computed as ( r = +0.731 and p<0.05).
This result demonstrates that in the pricing of chicken meat, other factors
are effective besides the feed input cost. In this research, monthly averages
of real whole chicken prices were taken and alterations in prices and seasonal
fluctuations were examined (Fig. 2).
When Fig. 2 is examined, it is observed that also seasonal
factors are effective in the chicken meat price formation in Turkish broiler
market. Chicken meat prices start to increase from summer months, make a peak
in August and September and shows drop tendency from October. Turkish Broiler
sector is rapidly affected from crises occurred due to different reasons and
speculations in parallel to production increase and employment provision.
Factors such as seasonal and periodic price fluctuations experienced in the market, the number of enterprises and production volume, animal population and productivities, animal epidemic diseases, economic secure environment, feed raw material prices, variations in substitute product (beef, fish, etc.) prices affect chicken meat supply. A reduction has occurred in chicken meat production as a result of high inflation, rising input costs, etc., during the economic crisis in 2001 in Turkey. The problems (claims of hormone use and HPAI outbreaks) experienced by the sector between the years 2004 and 2006 caused a decline in chicken meat demand and some integrated firms closed in the crisis.
Parallel to rapid drop in chicken meat demand, HPAI crisis has resulted in
drop in product prices decrease in broiler production and supply, decrease in
capacity utilization, unemployment in commercial poultry farms, temporary stagnation
in the poultry sector investments and increase in substitute product prices.
In this period, average chicken meat crices declined from 2.85 YTL kg-1
(2.34 $ kg-1) before the HPAI crises to 1.97 YTL kg-1
(1.61 $ kg-1) during the outbreak in Turkey (Yalcin,
2006). As in the result of bird flu epidemics, it is indicated that food
safety shocks occurring in the market have spread directly to marketing channels
and affected price margins at the wholesale and retail levels and damaged the
level and share of income in the broiler sector (Saghaian
et al., 2008).
In the survey research conducted by Cevger et al.
(2008), it is found that preference rates of Turkish consumers in brand
and packaged products is 51% before AI crisis emerged in 2005-2006 and has reached
to 78% after the crisis with increasing awareness level. The HPAI crisis has
become effective also on contracted broiler producers. Aral
et al. (2008), reported that the contracted broiler producers have
lost on average 1.38 cycles of production and their management fee reduced by
14.7% in 10 months after the HPAI outbreaks. As a result, the broiler production
and the enterprise income have declined by 34.8 and 44.3%, respectively in the
crisis period in Turkey. It was declared that feed cost has approximately 56-68%
and chick cost 19-22% share within broiler production costs (Cicek
and Tandogan, 2007). Economic crises experienced in Turkey in 1994 and 2001
have first increased input costs and this is also reflected to chicken meat
Nowadays, in spite of the progress in Turkish broiler sector observed in subjects such as production, processing, productivity, technology utilization, daily maintenance and feeding conditions, standardization; many of the existing problems are concentrated at the point of minimization of production costs, establishment of supply and demand balance, provision of efficiency in marketing and being competitive position in foreign sales.
Increasing enterprise scales, production volume, slaughter and processing capacity in broiler sector should be assessed under production planning and external trade opportunities should be searched together with consumption demand and self sufficiency level. Information and publicity activities should be applied with the aim of increasing chicken meat consumption.
Demirci (2008) was reported that there were variations
in poultry products sales depending on seasons and especially chicken meat sales
and general level of prices increase in summer months. In this research, it
was determined that August and September months were the most appropriate period
for chicken meat supply in terms of seasonal fluctuations and demand level.
For reducing broiler production costs in Turkey, precautions to balance the internal and external market prices of corn which composes a significant element of expense as feed raw material should be taken by the government. In addition, export support should be increased with the aim to provide competitive power of the sector and Value-Added Tax (VAT) rates of the products and customs duty tariffs applied to feed raw materials should be re-arranged to promote production.
As a result, it has been thought that also socio-economic, psychological and seasonal factors have an important role upon the chicken meat prices as well as supply-demand equilibrium in the market. Within this scope, the applications with reference to seasonal demand, input prices, consumer preferences, animal health and efficient production planning directed to the exportation of the integrated firms which active in the sector are so important.