Are Chicken Prices Going Up? A Look at the Key Drivers

Concerns about rising food prices are common among consumers, and chicken, a staple protein, is no exception. The cost of chicken is influenced by a diverse set of interconnected factors, making its price movements complex. This article will examine the current state of chicken prices and delve into the primary drivers contributing to these fluctuations. Understanding these dynamics offers insight into the economic forces at play within the poultry industry.

Current Landscape of Chicken Prices

Recent trends indicate that chicken prices have generally experienced upward pressure over the past year. While some cuts might see slight month-to-month decreases, the overall trajectory has been one of modest increases. For example, wholesale chicken prices were up over 33% year-over-year as of a recent report. Similarly, poultry prices increased by 3.1% in July 2025 compared to July 2024, despite a slight decrease from June to July 2025.

Consumer prices for poultry rose by 0.9% from May to June 2025, showing a 3.4% increase compared to June 2024. This reflects a pattern where chicken prices have seen notable spikes in recent years, including a significant rise in 2022. The U.S. Department of Agriculture (USDA) projects poultry prices to increase by about 2.5% in 2025, largely due to strong demand. This upward trend is consistent with broader food inflation.

Production Cost Drivers

Poultry farmers incur significant production costs. Feed expenses represent the largest portion of these costs, often accounting for 50% to 70% of total production expenses. Prices of key ingredients like corn and soybeans directly influence feed costs, and increases in these commodity prices translate to higher expenses for producers.

Labor costs also contribute substantially to the overall expense of raising chickens. These expenses typically range from 15% to 40% of a farm’s operating costs, covering routine operations, animal care, and maintenance. Energy costs, including fuel and electricity, are another significant expense for poultry farms. These can represent between 25% and 30% of annual gross farm income or total operating expenses. Maintaining flock health through veterinary care and disease management adds further costs, estimated to be around 10% to 15% of total operating costs for routine checks and vaccinations.

Processing and Distribution Expenses

Once chickens are raised, they move to processing facilities, incurring additional costs. Processing facility expenses cover the stages of slaughter, cleaning, cutting, and packaging the poultry. These operational costs include raw materials, utilities, depreciation of equipment, and taxes. Maintaining these facilities also requires ongoing investment in repairs and maintenance, which adds to the cost structure.

Transportation costs are a significant factor in moving chicken products from processing plants to retailers. Fuel prices directly affect shipping costs, and logistical complexities in the supply chain can lead to increased expenses. Packaging materials have also seen price increases due to higher energy, labor, and raw material costs. While some recent reports indicate a decline in certain packaging material prices, they generally remain above pre-pandemic levels. Finally, retailers incorporate their own operational costs and profit margins into the final price consumers pay.

Market Forces and Consumer Behavior

Beyond direct costs, broader market forces and shifts in consumer behavior significantly influence chicken prices. The fundamental balance between supply and demand plays a central role; when chicken availability decreases or consumer desire increases, prices tend to rise. Reduced production, sometimes due to factors like plant closures or lower egg placements, can tighten supply and drive up market prices. Conversely, strong consumer demand, particularly for specific cuts like boneless chicken breasts, can lead to price surges as producers work to meet preferences.

Broader economic inflation also contributes to rising chicken prices by increasing costs across the entire supply chain. Consumer preferences further shape pricing, as shifts in demand for specific product attributes, such as organic options or particular cuts, can lead to higher prices for those items. While consumers are often sensitive to price, especially during economic downturns, many are willing to pay more for products that align with their values or provide convenience. Seasonal demand, such as increased consumption during holidays or warmer weather for grilling, can also temporarily boost prices for certain chicken items.