High feed prices threaten widespread poultry farm closures in Indonesia

Independent broiler producers in Indonesia are facing the risk of widespread farm closures due to rising feed costs and declining purchase prices for poultry. According to the Indonesian Independent Farmers Association (Permindo), some farms could cease operations within the next two months if market conditions do not improve. The main challenge remains rising production costs amid low profitability in the poultry sector.

According to Permindo representative Asep Saepudin, compound feed prices have risen to $0.53–0.55/kg, while live broiler prices have fallen to $1.10–1.13/kg. Under these conditions, independent poultry farmers are losing $0.22–0.27 per bird raised. A prolonged imbalance between production costs and selling prices could lead to reduced output and force some smaller farms out of the market.

A corn shortage is placing additional pressure on production costs, as corn is one of the main ingredients in poultry feed. Limited supplies have pushed corn prices up to $0.46/kg, increasing the cost of raising broilers. Higher raw material prices are particularly challenging for independent producers that purchase feed on the market, as they have limited opportunities to offset additional expenses at current poultry selling prices.

In response to the deteriorating situation, Permindo has called on the Indonesian government to introduce measures to stabilize the market. The association is seeking a reduction in compound feed prices to $0.44–0.47/kg, stable corn supplies and measures to raise live broiler purchase prices to at least $1.32/kg. Industry representatives believe these steps would help restore the financial viability of independent poultry farms.

The association has also urged large vertically integrated producers to help stabilize market prices and support independent farmers. Permindo warns that without prompt action, rising feed costs and low poultry prices could result in the closure of a significant number of farms. The sector’s outlook will largely depend on corn availability, compound feed prices and the recovery of broiler production profitability.

Tags: Indonesia, poultry farm, compound feed