Analysis of Cost-Price Squeeze in Broiler Production Enterprise in Uyo Agricultural Zone of Akwa Ibom State, Nigeria

Abstract

This study aimed at Analyzing the Cost-Price Squeeze in Broiler Production Enterprises in Uyo Agricultural Zone of Akwa Ibom State. Specifically,  the study aimed at comparing the trends in feed costs and broiler meat prices in the study area.  The study relied on monthly secondary data from the Akwa Ibom State Agricultural Development Project, complemented with primary data from some long standing feed merchants from January 2000 to December 2011. Agricultural price indices (API) and Ordinary Least Square (OLS) trend estimation procedure were adopted as analytical tools in the study.  On the average, cost of broiler feeds increased by 2%, broiler meat increased by 1.3% per quarter. The index of prices received by broiler and index of cost paid out for feeds was consistently below 1 indicating the existence of cost-price squeeze in the broiler production enterprise.  The result of the estimated regression parameters indicate a greater increase in broiler feed costs, relative to broiler meat prices.  The research shows the existence of cost-price squeeze phenomenon in the broiler enterprise in the study area. The study recommends initiatives that would reduce the cost of poultry feed and/or boost the price of poultry products.

Keywords: Cost-Price Squeeze, Broiler Production Enterprises, Uyo Agricultural Zone, Akwa Ibom State, Nigeria.