NIGERIA – Nigerian poultry farmers are grappling with rising costs as the price of poultry feed continues to escalate, threatening the sustainability of their businesses.
Despite soaring production expenses, poultry processors are restricting how much farmers can charge, leaving them with slim profit margins and little room to adjust prices.
The ongoing crisis is part of Nigeria’s broader economic challenges, exacerbated by the removal of fuel subsidies in May 2023.
The policy shift led to a sharp increase in transportation and food prices, further fueling inflation. Essential feed ingredients, such as maize and soybeans, have also become more expensive, significantly raising production costs.
While the Nigerian government has banned poultry imports to protect local industries, domestic poultry farming faces severe threats due to these rising costs.
Farmers are struggling to stay profitable, with some making as little as US$0.13 per bird, equating to just US$130 for 1,000 birds after two months of production—barely enough to cover operational expenses.
Profit margins under pressure
The cost of a bag of chicken feed has surged from US$16.65 in December 2023 to US$18.49, intensifying financial strain on farmers.
Despite these rising costs, poultry processors have maintained buyback prices, preventing farmers from adjusting their selling prices accordingly. This rigid pricing strategy forces farmers to operate on unsustainable profit margins.
Many farmers are now scaling back production, raising concerns about a potential poultry shortage in the coming months.
Industry experts warn that nearly half of Nigeria’s poultry farmers are at risk of going out of business if the situation persists.
Supply chain challenges and currency instability
The rising cost of poultry feed is linked to multiple factors, including supply chain disruptions, climate change, and Nigeria’s high inflation rate.
A significant portion of raw materials used in feed production, such as maize and wheat, are either imported or sold locally at high prices due to currency fluctuations.
Some farmers are opting to export their produce to earn more in foreign markets, contributing to local supply shortages.
Chairman of the Poultry Association of Nigeria (PAN), Mojeed Iyiola, highlighted that intermediaries are inflating costs, worsening the financial burden on farmers.
In response, PAN has requested government approval for direct maize imports to bypass these middlemen.
Price controls and power dynamics
While independent poultry farmers struggle, processors—who manage slaughtering, processing, and distribution—continue to enforce price controls. This practice limits farmers’ ability to set prices that reflect their production costs.
Some processors also have exclusive agreements with feed suppliers, enabling them to buy feed at subsidized rates and resell it to contracted farmers at lower prices, locking them into fixed sales agreements.
Adekola Saheed, a poultry farmer, shared his frustrations with Nairametrics, explaining that raising 2,000 broiler chickens requires approximately 280 bags of feed, each costing US$18.49.
“Despite the rising cost of poultry feed, the buyback price offered by processors has not changed significantly. We are not the ones setting our prices; the processors are the ones dictating the price,” he noted.
Government intervention and industry outlook
Poultry farmers are urging the Nigerian government to intervene with subsidies or price regulations to stabilize the industry.
Without support, the rising production costs could lead to more farmers exiting the business, exacerbating food security concerns.
Meanwhile, in an effort to boost local production, Niger State Governor Mohammed Umaru-Bago has announced a US$2 million poultry farm project in Bosso Local Government Area as part of the federal livestock development program.
The initiative aims to create jobs and enhance poultry production capacity in the region.
However, industry stakeholders argue that localized interventions are insufficient to address the nationwide crisis.
They emphasize the need for comprehensive policy measures to reduce production costs and ensure the long-term sustainability of Nigeria’s poultry sector.
