Chicken prices set to rise due to increased costs, regardless of bird flu

The price of chicken in Australian supermarkets is poised to increase in the near future, driven by escalating production costs, even if the H5N1 bird flu virus does not spread to commercial poultry flocks. Ingham's Group, a leading supplier that provides 40 percent of the nation's chicken meat, has alerted investors to this impending price hike.

Edward Alexander, CEO of Ingham's, stated at a recent investor meeting that bird flu presents a "real and significant risk for the poultry industry." However, he emphasized that price increases are inevitable regardless of the virus's spread, as the industry grapples with rising operational expenses. The company's financial results for the 2025-26 period showed an average selling cost of $6.50 per kilogram, a 2.4 percent increase from the previous year. Alexander further warned of an additional $130 million in extra costs projected for 2026-27.

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Bird flu is a real and significant risk for the poultry industry.

While bird flu has so far only affected wildlife in Australia, the global impact on the poultry sector has been severe. Worldwide, the H5N1 strain has devastated flocks, often requiring the culling of entire populations once a single bird is infected due to its high contagiousness and lethality. Europe and the U.S. have been battling this strain for over five years, with significant impacts on both meat and egg production, leading to the culling of approximately 120 million commercial birds in Europe.

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An outbreak in one location does not automatically translate into disruption across our broad network. We have the ability to isolate affected areas, protect other parts of the network and redirect production and supply.

Ingham's has taken proactive measures to prepare for such biosecurity threats. Executives have visited Europe to study prevention strategies, and the company has invested heavily in prevention, surveillance, scenario planning, and response protocols. Alexander noted that Ingham's has diversified its feed mills, farming, hatcheries, processing facilities, and distribution infrastructure across six states. This diversification, he believes, positions Ingham's better than competitors to handle an outbreak, allowing for the isolation of affected areas and redirection of production if necessary.

Alexander also pointed out that egg farmers might be more vulnerable to bird flu outbreaks due to the age of their birds and generally lower biosecurity controls within that segment of the industry. Meat chickens, being raised indoors, benefit from some protection against infection from wild birds. Despite these industry-wide challenges and risks, Ingham's is focused on managing costs and maintaining supply chains.

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This is simply because of the age of the birds; an older bird is slightly more susceptible to catching avian flu and generally speaking there's lower biosecurity controls in place across that industry.