Sensemaker Special: The price of chicken

Long stories short

• The head of the CIA said Putin still wants to conquer most of Ukraine.
• The singer R Kelly said he would appeal a 30-year sentence for trafficking and sex crimes. 
• Emma Raducanu and Andy Murray crashed out of Wimbledon but Maxime Cressy, an old-school serve and volley specialist, stayed in.

The price of chicken

How much should a chicken cost? It’s a question that bears intimately on the cost of living crisis and the twin struggles for nature and animal welfare, and the answer won’t please a lot of people.

In real terms, chicken is nearly three times cheaper today than in the 1960s. It used to be a luxury, and has become our favourite meat. The average price of a kilo of chicken is £3; less than a pint. Whether prices can stay this low as inflation nudges 10 per cent looks doubtful.

There are at least three reasons:

• Brexit. Poultry producers and the meat sector in general have been struggling since Brexit, as exports have run into red tape and the supply of foreign seasonal labour has been choked off. “At the beginning of this year our members were reporting on average they had 16 per cent vacancies,” says Richard Griffiths, chief executive of the British Poultry Council. It’s not just the grisly nature of the work but the fact that chicken farms are often located in parts of the UK with high employment. Workers just aren’t available.

• Ukraine. It’s getting more expensive to feed farm animals. This is partly because global grain markets have tightened in response to the war in Ukraine and the loss of its exports, but also because so many countries have curbed food exports to protect their home markets. Malaysia recently limited exports of live chicken in an effort to keep poultry affordable and available for its own population, causing alarm in neighbouring Singapore where ‘Hainanese chicken rice’ is a treasured dish.

• Tight margins. All this is hitting an industry that operates on the narrowest of margins. Data gathered for the Tortoise Better Food Index of Britain’s 30 biggest food companies underlines how slender the meat industry’s margins are. For meat companies in the Index, the average profit margin is 6.6 per cent, compared with 9.07 per cent for non-meat companies. One of the UK’s biggest poultry producers , 2 Sisters had one of the lowest margins of all –  less than 1%.

Some farmers are on ‘cost trackers’ that allow some of the rise in feed costs to be passed on to buyers, says Minette Batters, president of the National Farmers Union. But others are less insulated from price shocks.

Batters says some retailers will absorb costs, but if UK prices go on rising it could lead to more chicken being imported, “produced to standards that are illegal”. One example of differing standards is on how densely chicken can be stocked; in many European countries poultry can be kept more crowded together than in the UK.

“What can [consumers] afford to buy, where are they going to trade to?” Batters asks. “Are they going to trade to frozen next and step back from fresh? Nobody quite knows what the consumer is going to do.”

Low-cost dream. The industry could become more efficient through automation, but needs time for investment, says Griffiths of the British Poultry Council. “We’re going to need support through that period. As of now, we need better access to non-UK labour.”

High-cost reality. In the Backstory this month, Justin King, former chief executive of Sainsbury’s, predicted chicken in the UK could become 20-30 per cent more expensive unless production practices changed.

But Griffiths said UK industry had “no appetite or desire” for lowering standards. “We want to keep the standards we have, and for our government to defend and improve them. Chicken is the core meat protein for the majority of people. So we are very aware of the effect of price rises and the inability to be able to access and afford food.

“We don’t want people to drop out and not afford our products.”

But the way things are going, people will. 

The price of chicken doesn’t reflect its true cost, and the same can be said for nearly all cuts of meat. Changing the pricing strategy that we’re used to will require sensitivity: pricing out low-income consumers is not the answer. Neither is maintaining our system of undervaluation. Something’s got to give, and eating less meat is a good option. 

Visit The Better Food Index site to see full rankings and analysis.

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CAPITAL ECONOMY, BUSINESS AND FINANCE

Which? v airlines
British Airways is accused of telling customers they can get compensation after a five-hour delay when in reality they can get it after three. Ryanair is accused of blacklisting hundreds of passengers for credit and debit card “chargebacks” (when customers instruct their card issuer to halt or reverse a payment). The accuser in each case is Which?, the UK consumer magazine, which wants more powers given to the Civil Aviation Authority to fine airlines when they trample on consumers’ rights. TUI is also accused of misleading customers about their rights to compensation, and Simon Calder, the veteran air travel expert, told audience members at our ThinkIn last night they were entitled to hundreds of pounds in compensation for cancelled flights – money that BA and others appear to be denying they are required to pay under EU rules that continue to apply in the UK to flights to or from EU airports. Suggestion: do the right thing.

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TECHNOLOGY AI, SCIENCE AND NEW THINGS

Europe v Google
Google will be googling Ursual Pachl today. She’s an Austrian lawyer and deputy director-general of the Bureau Européen des Unions de Consommateurs (BEUC), Europe’s biggest alliance of consumer rights groups, and she’s launched a punchy attack on Google for putting tens of millions of Europeans “on a fast track to surveillance” with its sign-up protocols. The search giant makes handing over personal data easy and withholding it hard, she says, and it’s a repeat offender, “tracking and profiling” consumers three years after the BEUC first complained about its data harvesting. She’s especially vexed that you have to open a Google account to access most services on an Android phone, and wants Google fined under EU data protection laws. Its parent company made profits of $16.4 billion on revenues of $68 billion in the first quarter of this year. 

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The 100-year life health, education AND GOVERNMENT

Life or death decisions
The gulf between US Supreme Court justices on Roe v Wade is deep. But there are signs of bridge-crossing from the conservative majority. Last week the court ruled 5 to 4 in Nance v Ward that a death row prisoner could continue with his request to change his method of execution from lethal injection to firing squad – a majority made interesting because Chief Justice John Roberts and Justice Brett Kavanaugh sided with the liberals. Their position reflects a wider trend: the death penalty no longer commands automatic support within the GOP. New analysis from the Death Penalty Information Centre lays out the bias in terms of race and intellectual disabilities in conviction numbers, and Republican representatives have been crossing the aisle to support Democrats’ and civil liberties groups’ efforts to curb or ban the penalty. It’s a smart move: overall public support for capital punishment is at its lowest since the 70s at just over 50 per cent. 

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Our planet CLIMATE AND geopolitics

Rare earths fake news
A pro-Chinese spamming organisation called Dragonbridge has been posting fake environmental content about a US government-funded rare earths refinery in Texas. Posts on Facebook and Twitter say the plant would expose the surrounding area “to irreversible environmental damage” and radioactive contamination, the FT reports. This isn’t true, the Australian firm building the plant insists. What is true is that any non-Chinese rare earths processing capacity would undermine China’s stranglehold on the global EV battery supply chain. Rare earths aren’t rare but they are essential in trace quantities for lithium-based batteries, and they’re dirty to process. China has sunk billions into a processing infrastructure that’s unbeatable on price thanks partly to lax environmental standards. The US is playing catch-up.

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CULTURE soCIETY, IDENTITY AND BELONGING

Nato’s big update 
Remember 2012? Putin was mere prime minister of Russia under Dmitry Medvedev, his then congenial stooge. China was inextricably bound into western capitalism by bonds of trade and mutual academic interest, or so it seemed. And London was world capital of happiness as host of the Olympics. Ten years on, Nato has just completed its most important summit in decades, opening up membership to Finland and Sweden while closing ranks against Russia as “the most significant and direct threat” to alliance security; and warily inviting China to drop its “coercive challenges” to the international order. As David Herszenhorn notes, in its last ten-yearly “strategic concept”, Nato called Russia a strategic partner and made no reference to China. Progress is not a given.

Thanks for reading. Please share this around and tell us what we’ve missed. News tips and story ideas are welcome. Email them to sensemaker@tortoisemedia.com.

Jeevan Vasagar
@jeevanvasagar

Maddy Diment
Researcher

With additional reporting by Giles Whittell, Phoebe Davis and Tortoise Intelligence.

Photographs Getty Images

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