Why chicken prices move: what actually sets the price

When chicken prices move, everyone notices: the restaurant owner buying hundreds of kilos a week, and the family buying two birds. The question rarely asked is what moves that price in the first place. The answer is not the seller's mood, and not supply and demand alone — it is a long cost chain that begins months before the pack reaches the fridge, and most of its links sit outside the Kingdom. Once you understand that chain, you can read a rise or a fall correctly: is it a passing wave worth waiting out, or a shift in cost that will stay with you for months?

Start with the actual picture. The General Authority for Statistics (GASTAT) publishes a monthly Average Prices of Goods and Services bulletin, which tracks the average price of fresh local chicken in a 900 g pack. In June 2026 that average was SAR 17.58, against SAR 17.52 in May 2026 — a slight month-on-month move. But the median of that same monthly series since it began in January 2009 is around SAR 12.38, and that captures the key idea: the price does not jump at random from week to week; it moves in long cycles that follow cost. Watch a week and you see noise. Watch a year and you see a trend.

Feed: the biggest factor, by a wide margin#

If you only understand one factor, make it feed. The Grain and Feed Annual report on Saudi Arabia from the USDA Foreign Agricultural Service (report SA2025-0003, 20 March 2025) states that feed accounts for approximately 70 percent of broiler meat production costs. Of every riyal of cost, seventy halalas is feed. That is why chicken prices track global grain markets more closely than they track any other local factor.

The feed formula itself is well known and fairly stable. The same report describes the typical local poultry ration as 60 percent corn, 30 percent soybean meal and 10 percent other ingredients, with corn making up roughly 60 percent of poultry feed formulations overall. Corn is preferred because it is highly digestible and a good source of dietary energy; soybean meal is preferred for its high protein content. Put plainly: the price of chicken in Riyadh is tightly linked to the price of corn and soybeans on world markets.

A practical rule for buyers: when you hear about a surge in global grain prices or in ocean freight rates, expect the effect on chicken prices in weeks, not days. Feed is bought, stored and consumed across a full growing cycle before its cost shows up in the price of the bird.

Why your local price is tied to fields outside the Kingdom#

The largest ingredient in feed is imported by nature. According to the same report, Saudi Arabia produced about 135,000 MT of corn in marketing year 2024/25 on 31,000 hectares, averaging 4.4 MT per hectare — a very small figure against consumption of roughly 4.85 million MT in the same year. The reason is a stated water policy: the government does not provide direct production subsidies or guaranteed prices to corn growers, and discourages water-intensive crops. The result is that feed corn is almost entirely imported, so its cost becomes a world cost plus freight.

The scale of those imports is large and growing. Corn imports hit a record of roughly 5 MMT in marketing year 2023/24 and are projected to fall by about 500,000 MT in 2025/26, while total corn consumption is projected to grow around 4 percent to 5.1 MMT — and the main driver of that demand growth, the report states explicitly, is the continued expansion of local chicken meat production. The industry's own growth increases its appetite for an imported input.

One detail explains how shocks are partly absorbed. The report notes that local commercial feed processors increase corn use by up to 40 percent when its price sits between $230 and $240 per MT, and that when corn and alternative grains are expensive they raise the use of fiber sources such as wheat bran, alfalfa and soy hulls to reduce the need for corn. In marketing year 2022/23, when the CFR Saudi port price reached roughly $340 per MT, processors did exactly that. But this flexibility is limited: a poultry ration is far less adjustable than a livestock ration, because the bird needs energy and protein in precise proportions to reach weight on schedule.

Time cannot be bought: the production cycle explains the lag#

When demand jumps suddenly, a producer cannot double output next week. A broiler goes through a grow-out cycle measured in weeks, preceded by incubation measured in days, and behind all of it a breeder flock planned months earlier. A decision to raise output today shows up in the market only after a relatively long delay — and the reverse is equally true: a decision to cut output because feed became expensive also lands late. This structural lag is why chicken prices move in up-and-down cycles instead of settling at a single point.

The rest of the cost: energy, labour and cold transport#

The remaining thirty percent is no detail. A modern farm runs ventilation, heating and cooling around the clock; a processing plant is an energy- and water-intensive production line; and then comes the link many operators consider the most expensive of all — refrigerated transport and cold storage from plant to warehouse to your branch. Any increase in energy, fleet or skilled-labour costs passes into the price much as feed does, only more slowly and less sharply. The main drivers here are:

• Energy: running closed houses and chilling and freezing lines around the clock.
• The cold fleet: buying, maintaining and fuelling vehicles, and meeting food-transport requirements.
• Skilled labour: line operators, quality supervisors and maintenance technicians, not general labour.
• Packaging: trays, films and labels, whose prices track petrochemicals and paper.
• Medicines, vaccines and biosecurity: a fixed cost that cannot be dropped.
• Losses: every bird lost or product rejected at inspection spreads its cost over what remains.

Imports: the ceiling that caps the local price#

The Saudi market does not operate in isolation from imported chicken. Part of demand is met by imported frozen product, whose main sources are the large exporting countries — Brazil first among them for years, per USDA Foreign Agricultural Service reporting. That alternative sets a practical ceiling: if fresh local prices climb far enough, a share of buyers — especially restaurants and caterers who work with frozen portions — switch to imported product. But the ceiling is not rigid, because fresh and frozen are not perfect substitutes: many kitchens and households prefer fresh for operational or taste reasons, and that difference keeps a standing price gap between the two.

Policy and support: what is subsidised and what is not#

Many people conflate the existence of agricultural support with an assumption that poultry feed is fully subsidised. The picture is more precise than that. The Grain and Feed report notes that the government revised its animal feed subsidy regime as of 1 January 2020 and limited feed import subsidies to feed fibers — hay, straw and similar — based on their protein and energy content, at rates ranging from $121 to $304 per MT, paid to commercial dairy farms and feed processors. In other words, the core ingredients of a poultry ration, corn and soybean meal, sit outside that fiber subsidy — which leaves poultry feed cost largely exposed to the world price.

The broader policy direction, meanwhile, pushes toward more local production. The report notes that the Kingdom aims to meet 85 percent of its chicken meat demand from local production within the next few years, that production in the year before the report covered roughly 70 percent of consumption, and that the stated government goal is self-sufficiency by 2030. Over the long run that expansion reduces reliance on imports — while simultaneously raising domestic demand for imported feed. It is the equation that explains why "more local production" does not automatically mean "a lower price tomorrow".

Seasonality: demand that moves before supply#

Above cost sits demand, and demand moves faster. Consumption rises in Ramadan, holidays, occasions and family gatherings, and eases at other times, while production is constrained by the growing cycle described above. The predictable result: upward price pressure in the weeks before a season, and a fall after it. This seasonal movement is entirely different from a cost movement: the first ends when the season ends, the second stays as long as feed prices stay. Confusing the two is what most often pushes a buyer into a bad decision — signing a long contract at a seasonal peak, or delaying a purchase waiting for a drop that will not come, because the cause was cost and not a season.

What this means for you in practice#

If you buy for a restaurant, the goal is not to catch the cheapest price in a given week but to protect your average cost across months. These steps do that:

1. Ask your supplier for pricing with a fixed term (a month or a quarter) instead of a quote that changes weekly, and write the review mechanism into the contract.
2. Track exactly one external indicator: the direction of global corn and soybean meal prices. It is the closest early signal for your cost weeks ahead.
3. Fix the specification before you negotiate price — weight, grade, cut, ice content, packaging — because comparing prices without a common spec is meaningless.
4. Cost on the net weight you actually use, not the weight you buy; the apparently pricier option is often cheaper once yield is counted.
5. Split volume across at least two suppliers where your size allows, to protect yourself from an outage or a sudden jump at one of them.
6. Plan for peak seasons well ahead: book volume early instead of buying in the same week at peak prices.
7. Re-price your dishes off a moving average of cost, not off the last invoice, so your menu is not chasing the market every week.

Do not judge a supplier on a single quote. A supplier who raises prices when corn rises and lowers them when it falls is safer over the long run than one holding an inexplicably low price — a price nobody can explain is usually paid for out of quality or supply reliability.

If you are buying for a household, the same principle applies in simpler form: a whole bird usually costs less per kilo than pre-cut portions because you are paying for the butchery, and buying when the price dips and freezing properly extends the benefit of a good price for months — provided freezing is at −18°C and thawing happens in the fridge, not on the counter. Before any of that, buying the right quantity matters more than the price: chicken bought and not eaten in time is the most expensive thing in your basket, whatever it cost.

In summary: read the price as a result, not as news#

The price of chicken is not a number that gets announced; it is a result that gets assembled: feed at roughly seventy percent of cost and mostly sourced from world markets, a growing cycle that cannot be shortened and therefore delays supply's response, energy and cold transport and packaging and losses, imports acting as a flexible ceiling, policy pushing toward larger domestic production, and seasonality that lifts demand before supply can follow. Understand those elements and you respond to a price rise with a decision rather than a reaction: you know when to wait, when to contract, and when to change the specification or the cut you use instead of changing the supplier.