1.1 Introduction
Poultry production is defined as the branch of animal agriculture that involves the rearing of domesticated birds such as chickens, turkeys, ducks, and quails for the purpose of producing meat and eggs for human consumption (FAO, 2022). In Nigeria, poultry production is one of the fastest-growing livestock enterprises, with increasing participation from small, medium, and large-scale farmers due to rising demand for poultry products (Afolabi & Adeyemi, 2021). However, the sustainability and profitability of poultry production are strongly influenced by the cost of production inputs. An increase in price refers to a general rise in the cost of goods and services over time, often driven by inflation, supply shortages, exchange rate fluctuations, and increased demand for raw materials (Central Bank of Nigeria, 2023).
In poultry production, price increases are particularly evident in feed ingredients such as maize, soybean, fishmeal, and additives, which constitute a major portion of production costs. Other essential inputs affected include veterinary drugs, vaccines, energy, housing materials, and transportation services.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are significance of the study, scope of work, research hypothesis and questions, limitation of the study and definition of terms.
1.2 Background of Study
Poultry production is an important subsector of agriculture that involves the rearing of domesticated birds such as chickens, turkeys, ducks, and quails for meat and egg production. It contributes significantly to food security, income generation, employment creation, and poverty reduction, especially in developing countries like Nigeria. According to the Food and Agriculture Organization (FAO, 2022), poultry production remains one of the fastest means of bridging the protein deficiency gap in many African countries due to its relatively short production cycle and high conversion efficiency of feed to animal protein. In Nigeria, poultry farming is widely practiced across rural and urban areas, with increasing participation from small and medium-scale farmers who supply both local and regional markets (FAO, 2022).
According to the Central Bank of Nigeria (CBN, 2023), inflationary pressures in Nigeria have continued to rise steadily, leading to increased costs of goods and services across all sectors of the economy, including agriculture. The poultry subsector is particularly affected because feed, which constitutes about 60 to 70 percent of total production cost, has experienced persistent price increases due to rising costs of maize, soybean, fishmeal, and other essential raw materials.
Adebayo and Yusuf (2021) reported that, the continuous rise in feed prices has significantly reduced the profitability of poultry farming in Southwestern Nigeria, forcing many farmers to either scale down production or exit the business entirely. They asserted that poultry farmers often struggle to maintain production efficiency when input prices fluctuate unpredictably, thereby affecting overall output levels. Similarly, Ojo (2020) stated that the rising cost of veterinary drugs, vaccines, and transportation services has further compounded the financial burden on poultry producers, especially small-scale operators who lack access to financial support and credit facilities.
In the same vein, according to Adeyemi and Oladipo (2022), they affirmed that fluctuations in exchange rates have indirectly contributed to the rising cost of imported poultry inputs such as premixes, medications, and equipment. They contended that this situation has made poultry production less attractive to new investors while existing farmers face declining profit margins. On the other hand, the demand for poultry products such as eggs and chicken meat continues to rise due to population growth, urbanization, and increased awareness of animal protein consumption, thereby creating a demand-supply imbalance in the market.
National Bureau of Statistics (NBS, 2023) asserted that, food inflation in Nigeria has remained high in recent years, affecting the affordability of basic food items including poultry products. The report stated that increases in transportation costs, fuel prices, and insecurity in agricultural regions have disrupted supply chains, thereby increasing production and distribution costs. According to Ibrahim and Salami (2021), they reported that many poultry farmers in Southwestern Nigeria adopt coping strategies such as reducing flock size, using alternative feed formulations, or delaying restocking in response to rising production costs. They affirmed that while these strategies may temporarily reduce expenses, they often lead to lower productivity and reduced market competitiveness. Similarly, according to Olumide (2020), it was stated that inadequate government intervention in the form of subsidies and price stabilization policies has further worsened the challenges faced by poultry farmers.
In Akure, Ondo State, poultry production is a major agricultural activity that supports livelihoods and contributes to the local economy. However, according to field observations and agricultural extension reports, farmers in the area are increasingly facing challenges related to the rising cost of inputs, fluctuating market prices, and limited access to affordable credit facilities.
This study is set against the backdrop of understanding how these rising costs influence poultry production in Akure, Ondo State, Nigeria.
1.3 Statement of Problems
Investigation revealed that the increasing price level in poultry production is creating a situation where many farmers are finding it difficult to maintain stable production cycles. Production output is declining as farmers reduce flock size or abandon poultry farming altogether due to unsustainable costs. The market price of poultry products such as eggs and broilers is also increasing, but not at a rate that matches the rising cost of production, thereby leading to reduced profitability. In many cases, poultry farmers are unable to break even, resulting in financial losses and reduced reinvestment into the business.
Furthermore, consumers are experiencing higher prices of poultry products, which affects protein consumption patterns and household nutrition. This creates a wider economic and social challenge where affordability of animal protein is reduced, thereby affecting food security. The instability in input prices also makes planning and forecasting difficult for poultry farmers in Akure, as production decisions become uncertain and risky. It is against this backdrop that this study seeks to examine the influence of increase in price on poultry production in Nigeria.
1.4 Aim and Objectives of Study
The aim of this study is to assess the influence of increase in price on poultry production in Akure, Ondo State, Nigeria. In achieving this aim, the following specific objectives were laid out as follows:
- To examine the effect of rising feed prices on poultry production output in Akure.
- To assess how increase in price of poultry inputs affects farmers' profitability.
- To determine the impact of price increase on the scale of poultry production.
- To evaluate the relationship between input price increase and cost of poultry products.
- To identify coping strategies adopted by poultry farmers in response to rising prices.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- How does increase in feed prices affect poultry production output in Akure?
- What is the effect of rising input prices on poultry farmers' profitability?
- How does price increase influence the scale of poultry production?
- What is the relationship between input price increase and cost of poultry products?
- What coping strategies do poultry farmers adopt in response to rising prices?
1.6 Research Hypotheses
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
Hypothesis One
- H0: There is no significant relationship between increase in feed prices and poultry production output in Akure
- H1: There is a significant relationship between increase in feed prices and poultry production output in Akure
Hypothesis Two
- H0: There is no significant effect of rising input prices on poultry farmers' profitability
- H1: There is a significant effect of rising input prices on poultry farmers' profitability
Hypothesis Three
- H0: There is no significant relationship between price increase and scale of poultry production
- H1: There is a significant relationship between price increase and scale of poultry production
1.7 Significance of Study
It is believed that at the completion of the study, the findings will be useful to agricultural economists and researchers by providing updated data on the relationship between inflation and livestock production in Nigeria. The study will also contribute to existing literature on agricultural price dynamics and will serve as a reference for future studies in poultry economics and food security.
Furthermore, government agricultural agencies will use the findings to design policies that will stabilize input prices and support livestock production. In addition, financial institutions will use the findings to assess credit risks and will improve loan support structures for poultry farmers.
Lastly, researchers will use the study as a reference point for further studies on agricultural pricing and production systems.
1.8 Scope and Limitations of the Study
The scope of this study is confined to poultry production activities in Akure, Ondo State, Nigeria, with emphasis on how price increases affect production performance, profitability, and sustainability among poultry farmers.
The study does not extend to large-scale industrial poultry operations outside Akure, nor does it cover international poultry markets or unrelated agricultural subsectors.
1.9 Definition of Terms
Poultry Production:
Poultry production refers to the rearing and management of domesticated birds such as chickens, turkeys, and ducks for meat and egg production. According to FAO (2022), it is a major source of animal protein and income generation in developing economies.
Price Increase:
Price increase refers to a sustained rise in the cost of goods and services over time, often associated with inflation. According to the Central Bank of Nigeria (CBN, 2023), it affects purchasing power and production costs across sectors.
Inflation:
Inflation is the general rise in prices of goods and services in an economy over a period of time. According to NBS (2023), it reduces consumer purchasing power and increases production costs.
Poultry Feed:
Poultry feed refers to a mixture of ingredients formulated to provide nutrients required for poultry growth and productivity. According to Adebayo and Yusuf (2021), feed accounts for the largest share of poultry production cost.
Profitability:
Profitability refers to the ability of poultry farmers to generate financial gains after deducting production costs from total revenue. It is a key indicator of business sustainability.
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