The National Chicken Council this week issued the following statement to reporters following media stories about the Georgia Dock price index:
Chicken companies use a variety of methods and price reporting programs to sell their products. The Georgia Dock is a long-standing, publicly available index and is only one of several indexes used by chicken buyers and sellers, including USDA, Urner Barry, EMI, and Informa.
Using the Georgia Dock—or any other index—is entirely voluntary. No one is required to use the Georgia Dock, but many companies on both sides of the transactions have found it to be an effective way to start negotiating the price for chicken. So, only the buyers and sellers know the real transacted price. Implying that the Georgia Dock price is blindly accepted without any adjustment is very far from the actual situation.
The small birds reported by the Georgia Dock are consistently the most costly to produce based on weight categories and therefore tend to be consistently the size category receiving the highest price.
Retail and food service poultry buyers are very sophisticated, savvy managers and do not operate in a vacuum. Most if not all large volume poultry buyers retain outside consultants to continually advise them on price discovery and timing for purchases. In the very competitive market place it is difficult for sellers to gain an arbitrary price premium when the buyers have the clear and easy option to take their business to another chicken supplier.
Importantly, no matter what the Georgia Dock or any other price index says, chicken will only sell for the price the individual buyer and seller are willing to pay for it.
