Individual Report On Food Prices: Poultry Chicken
In this report I have chosen a food commodity that is poultry chicken about which the relevant information within the 10 year period from 2009 to 2019 will be given and briefly explained and data on how the oil prices affect the chosen commodity’s (chickens) price and then determine the data by using the demand and supply analysis and cross elasticity of demand and to see weather crude oil is a supplement good or complement to Poultry chicken and the link between the food prices and crude oil prices and all those other factors that affect the global food commodities. Poultry farming is the procedure of raising domestic birds like chicken, turkey, ducks, quail and goose for the purpose to get meat and eggs from them for food. 50 billion chickens are raised by farmers annually as a source of food for their meat and eggs. Chickens which are grown and raised for eggs are called layers and the chickens raised for meat purpose are known as broilers.
- The prices of chicken are 46.49% higher in 2019 as compared to 2000 and 13.17% higher as compared 2009, according to the U.S Bureau of labor statistics there was a difference of $9.3 in value.
- There are more chickens in this world than people around 25 billion.
- An average inflation rate of 1.24% was experienced by chicken per year. For example, if price chicken of chicken was $25 in 2009 now in 2019 it would cost $28.29 for the same purchase.
- The global production is forecasted to grow 2% to a record of 97.8 million tons in 2019.
- 90% of world poultry population is chickens.
- In the OECD, the consumption of pork and beef has been unchanged since 1990, predominantly in rich countries. The consumption of chicken has increased by 70%.
- Asia is regionally the largest meat producer and accounts for approximately 40-45% of the total production of meat. In recent decades this regional distribution has changed considerably.
- More than 70% of domesticated birds in Kenya provide meat and table eggs from indigenous chicken. They are sometimes brought up through the production system of the cage free backyards. This production system is categorized by small flock dimensions, and revenues are most often made at the farm gate. Even though IC production has huge lively hood progression potential, it does not describe and vary marketing systems. Pricing is regularly influenced by economy involvement. A study conducted by sixty eight farmers in the districts, reveals that 70 percent of all Indigenous chicken sales were carried on the farmer’s door while only 19 percent of local sales were made.
- Global production is predicted 3 % higher in 2019 to record 98.4 million tons. China and all producing countries have greatly enhanced the greatest rate of economic growth in five years. China’s demand may be durable as Swine Fever of Africa (ASF) influenza push customers to move other protein sources, with increased rate of chicken boosting growth. Though, high-pathogenic avian influenza (HPAI) prohibits imported genetic stock, limiting added growth, continues to challenge China. China is also facing challenges.
- The livestock companies are creating 1,814,200 part time jobs $100.2 billion in family incomes over the whole state, generating an annual impact on economy over$469.6 billion, as well as taxation of almost $32.9 billion. Around 374063 workers are employed by poultry industry in the US and some further 1440,180 are created in suppliers and also the auxiliary sectors. That would have jobs in enterprises that provide sector with product and services. And all job issues are important today. Indeed, that unemployment level throughout U.s is 5.47%. This tells that around 8 million people are looking for jobs in that country.
- Americans and South Africans consume more chicken meat than any other meat in the world. An average amount of 33kg of chicken in South Arica and 48.3 kg of chicken in America per person in a year. When worldwide chicken intake increases, manufacturers fulfill famished consumer demands.
The charts show that the percentage change in price of chicken in 2009 is not available because it is the base year so the percent change in 2010 increased by 10.5 % and by 15.08% in 2011 but in 2012 there was a decrease of -2.5% then again an increase of the same percentage 2.5% was recorded, in 2014 it was -16% a very big downfall in the price but only -7.1% change in 2016 and then in 2017 price difference was 8.3%. Last year in 2018 change was in negative -5.3 and currently it is 1.8%.
Cross Elasticity of Change in Oil Prices Affect the Food Prices
The particular idea is to increase inflation & reduce economic development by increasing oil prices. As far as inflation is concerned, petrol prices affect products made by petroleum directly. Changes in price of oil can reduce the supply of additional goods, as when the production costs are increasing. From 2010 to 2017, its supply for poultry chicken in world went up by 21.3 million tons; however the growth rate decelerated over most of the years. In the 1970s, Chicken’s rapidly increasing popularity all over the world began with an increasing awareness of health, said USAPEEC and consumption continued to grow because progress in breeding, feed selection, agriculture and processing has made the source of protein one of the world’s most cost-efficient. Global Demand & supply determine the price of the barrel for crude oil. If global crude oil demand is high and supply low, price of oil will also be high.
The percentage change in demand between the year 2015 and 2016 is 1.3% and supply 0.9% as you can see demand is more and supply is less and in 2017 a change of 1.01% is there and supply increases by 1.4. In 2018 1.10% change and lastly there is a huge change in demand for chicken in 2019 and supply is also almost the same as demand. The cross price elasticity of demand in 2015 is the base year so it’s not there but in 2016 it is 2.8 % and is elastic and fluctuating from that in 2017 there is a big change and it is highly elastic then in 2018 there is a huge downfall in cross price elasticity of demand by -4.4 % in this it is inelastic and by 2019 again a high increase is seen by 7.4 % by which it is shown that it is highly elastic.
Substitutes and Compliments
When the chicken price declines in one year, substitute goods prices increase. People are more willing to buy or consume chicken because it is more affordable compared with other meat product such as, duck or beef. The chicken price is a positive link with the quantity of its replacement demanded. The amount of the substitute product demanded will decrease if the price of the chicken decreases. However, the price of substitute goods demand for chicken will increase
The Link between food prices and any other factors that are affecting world food prices. The world’s system of food currently depends heavily on transport & fuel. The currently high energy-heavily reliant agricultural production system is almost certainly less affordable in the near and medium term and less secure and food more affordable. Food autonomy must be promoted and fuel supplies to the food system must be reduced at all levels. Therefore, higher oil prices pressurize on all of the food system elements. If there is any link between oil prices and food prices it is very small. Crude oil is indeed the world’s most commercial commodity. A variety of factors affect oil prices every day, however apart from supply and demand. Related to crude oil, a number of complex factors influence food prices. When commodity prices have been decided only by supply and demand variables in the olden days, several factors are now involved. The prices of food can either increase or fall in political and economic circumstances. A large amount of people (farmers, packers, processors, retailers, etc.) are needed to make the Agri – food system work. In this system, there are many job opportunities. When labor costs increase (e.g. minimum wage increases), food prices can rise. When prices of oil and petrol for transporting food have increased it can affect the world food prices. Any disease or virus in animals and poultry can affect prices and weather climate changes can affect global food prices. In harvest season, all plants are affected by weather. If the wet, dry or cold or warm season becomes too warm, plants can’t survive. A shortage or scarcity of a crop could lead to more cost. Prices for food could fall if a hot and dry season outcomes in surplus. Government and legal factors and income growth and population All these other factors may result in increase or decrease in food prices.
To conclude this report it shows the data and information related to chicken for the past ten years and introduction about the chosen commodity poultry chicken. Then the price rate change comparison between crude oil and poultry chicken and the chart is also given for further understanding and a few graphs and a visual image and then the cross price elasticity of demand using the formula and showing that if it was elastic or inelastic. Determine that chicken is a substitute or complement and then show the link between food prices and crude oil prices and the other factors that are affecting the global prices of food.
⚠️ Remember: This essay was written and uploaded by an average student. It does not reflect the quality of papers completed by our expert essay writers. To get a custom and plagiarism-free essay click here.