KENYA – A new report by the Competition Authority of Kenya (CAK) has revealed that the price of chicken feed in Kenya has surged by at least 37% over the past four years, forcing many poultry farmers to resort to producing their own feed to stay afloat.
The report highlights the escalating cost of poultry feed in Kenya, which is nearly double that in South Africa and Brazil.
Even imported feed from a manufacturer in Dar es Salaam remains more affordable than locally produced alternatives, despite additional costs such as transport and import duties.
The CAK report highlights the growing threat to the profitability of poultry farming in Kenya and other countries worldwide.
ReportLinker highlights that farmers in Ghana, Pakistan, and South Africa are also struggling with rising prices for essential feed components like maize and soybeans. The same issues have been reported in Nigeria.
In the United States, the impact is evident in the rising cost of eggs, contributing to broader economic turbulence and increasing grocery bills for consumers.
This trend is attributed to a combination of climate change, geopolitical tensions, and logistical challenges, which have led to crop failures, trade disruptions, and increased transportation expenses.
Impact on farmers and industry
In Kenya, the situation has prompted farmers to explore alternative feeding methods. According to the Federation of Kenya Poultry Farmers (FKPF), some are turning to innovative solutions like Black Soldier Fly larvae, azolla, duckweed, omena, and homemade feed formulations, which can reduce feed costs by up to 75%.
Despite these cost-cutting measures, the price of a 50-kilogram bag of layers mash has more than doubled over the past five years, from US$14 to US$32, while egg prices have remained stagnant at around US$2 per tray.
This imbalance has squeezed farmers’ profit margins, leading to declining sales for feed manufacturers.
The economic pressure on poultry farmers is also evident in the closure of at least 30 feed production companies in Kenya over the last three years, resulting in the loss of over 1,000 jobs.
As a survival strategy, more farmers are opting for self-mixed feeds to cut expenses. However, the high cost of poultry feed continues to impact consumers directly, with chicken meat prices in Kenya nearly twice as high as in South Africa.
A kilogram of chicken costs approximately US$6.71 in Kenya, compared to US$3.35 in South Africa.
Market dynamics and challenges
Kenya imports most of its soybean meal, sunflower cake, and some maize for feed production from Tanzania, Uganda, Malawi, and Zambia.
The supply chain is controlled by four major companies that oversee the entire production process, from importing raw materials to milling and distributing the final feed products.
This market concentration has raised concerns about competition and pricing practices. According to the CAK report, a more competitive feed market could save Kenyan farmers over US$23.4 million annually, lower poultry prices, and create more jobs in the sector.
The challenges in the poultry industry go beyond high feed prices. In November, Nairobi poultry farmers raised concerns about market control by powerful cartels at City Market, accusing intermediaries of setting artificially low prices that prevent farmers from covering production costs.
Many farmers from Kiambu and Machakos counties reported financial losses due to unfair pricing practices by wholesalers and middlemen.
Faced with escalating feed, veterinary, and maintenance costs, nearly 200 farmers gathered at a recent Nairobi Poultry Farmers Association meeting to demand government intervention.
The association’s head, Samuel Ndung’u, urged authorities to implement regulations to curb monopolistic practices and promote fair competition.
Farmers are advocating for a transparent pricing system that reflects actual production costs, fearing continued financial losses and further decline in the industry without policy reforms.
Declining production and global context
Kenya’s poultry production has been on a downward trend, with chicken meat output falling from 88,700 metric tons in 2019 to 69,200 metric tons in 2020.
The peak was recorded in 2018 at 131,700 metric tons, but the sector has since struggled to maintain growth.
A proposed trade agreement between Kenya and the United States has further unsettled local farmers, as they fear that allowing U.S. poultry imports could destabilize the domestic market and drive prices even lower.
Search for solutions
The challenges posed by escalating feed prices require a collaborative approach involving government and industry stakeholders.
ReportLinker suggests potential policy interventions, including subsidies for feed costs, investment in research and development for alternative feed sources, and support for more efficient poultry farming practices.
In Ghana, government involvement has been highlighted as crucial for the sector’s survival, while in Pakistan and South Africa, industry support mechanisms and policy reforms are seen as vital for sustaining the poultry industry.
Experts also suggest that strengthening farmer cooperatives could help producers secure better prices and reduce reliance on middlemen.
Improved financial management and sustainable farming practices may further enable poultry farmers to withstand economic pressures in the long term.
