Chicken Prices Hit Record High as Analysts Warn of Even More Increases

Tyson food frozen chicken products sit in refrigerated section of a store in Washington, on Aug. 8, 2023. (Anna Moneymaker/Getty Images)

Chicken prices at grocery stores have hit record highs, and analysts say they’re likely to stay elevated as Tyson Foods and other producers dial back poultry production.

The latest numbers from the Bureau of Labor Statistics show that the prices of whole fresh chicken sold at stores hit their highest level ever of $1.958 per pound on average in U.S. cities in August, the latest month of available data.

Bone-in chicken leg prices also have climbed to record highs of $2.031 per pound, retail.

And while chicken breast sold at stores is down from its recent all-time high of $4.746 per pound, it remains not far off and well above pre-pandemic levels.

(Source: Bureau of Labor Statistics)

(Source: Bureau of Labor Statistics)

The sky-high chicken prices comes despite the overall pace of inflation showing a more or less steady decline, falling from a recent peak of 9.1 percent in June 2022 to 3.7 percent in August 2023.

But many Americans may be reluctant to accept the prevailing narrative that inflation is on the wane when the shop for groceries and increasingly pick chicken over costlier protein alternatives like beef and pork.

Demand for Chicken

Demand for chicken among inflation-weary consumers is on the rise, with the latest data from the U.S. Department of Agriculture projecting that the annual chicken consumption in the United States will rise above 100 pounds per person on average in 2023 for the first time in history.

“We should see improving demand for chicken going forward,” Bill Densmore, senior director for Fitch Ratings, told Reuters. “We'll see retail beef prices remain high.”

Beef consumption is expected to hit its lowest level since 2018, in part caused by rising prices due to a decline in cattle supplies. Similarly, reduced consumer spending has led to the lowest pork consumption since 2015.

Chicken prices could face continued upward pressure as demand continues to climb in the face of pricier alternatives and as major poultry producer Tyson Foods recently announced the closures of six chicken plants in the United States.

Tyson earned massive profits when meat prices pushed higher during the pandemic, but then faced a glut of chicken, pressuring its bottom line.

Government data show that U.S. facilities that hatch chicken eggs reduced the number of eggs placed in incubators by roughly 3 percent in the six weeks ended Sept. 23 compared to a year earlier.

Similarly, chicken producers placed 2.7 percent fewer chicks for meat production over the same period, with analysts saying that tighter supplies are likely to keep pressure high on prices.

“They cut back,” Bob Brown, an independent livestock market analyst, told Reuters. “That seems to have buoyed the chicken market.”

Rabobank said in an analysis that producers have also tried to keep the weight of birds down this summer as part of efforts to lower supplies and bolster profitability.

All this suggests a longer life for the inflationary pressures that have been gripping U.S. households.

Inflation Still Squeezing Households

Although the pace of inflation has slowed sharply from the 9.1 percent peak in June 2022, several recent surveys indicate that Americans continue to feel the pain of high prices.

According to a Bankrate survey in July, 72 percent of Americans don’t feel financially secure. Among them, 63 percent say that high inflation is making it hard for them to be financially comfortable.

Another survey by Bankrate in June found that 68 percent of Americans are saving less for unexpected situations because of inflation.

And a survey from the nonpartisan Senior Citizens League showed that about two-thirds of retirees said that high prices have forced them to put off dental care, including major work such as dentures, bridges, and implants.

“High costs have significantly impacted older Americans’ ability to access healthcare,” the advocacy group said in a statement.

Nearly one-third of respondents said that they had postponed filling prescriptions or getting medical care, while 8 in 10 said that essentials such as food and housing are costing them more today than a year ago.

Inflation Eroding Wage Gains

U.S. workers say inflation continues to erode their income gains, according to new research from Bank of America (BOA).

Sixty-seven percent of workers say that inflation is outpacing their salary or wage growth, up from 58 percent in February 2022, per the BOA report.

“American workers continue to feel stressed about their finances and are concerned about keeping up with the cost of living,” Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America, said in the report.

“Companies who show a sense of urgency for their workforce by offering financial wellness programs and resources which support employees’ immediate needs and overall well-being will continue to stand out as employers’ of choice.”

Still, despite the persistence of inflationary pressures, over half (56 percent) of U.S. workers said they are “cautiously optimistic” about their financial health over the next two to three years.

By contrast, the latest University of Michigan Consumer Sentiment Index shows falling enthusiasm about economic conditions.

The preliminary reading for September shows that consumer sentiment has been retreating since hitting a near two-year high in July and falling short of market estimates.

“Consumers have taken note of the stalling slowdown in inflation, but they do expect the slowdown to resume,” Joanne Hsu, the surveys of consumers director, noted in the report.

Andrew Moran and Reuters contributed to this report.