Poultry farmers in Namakkal, one of India's foremost egg-production hubs, are facing acute financial distress as the cost of maize and key feed supplements has surged sharply, squeezing margins to the point where farmers are losing money on every egg and broiler chicken sold. Rising demand from ethanol manufacturers is being widely cited as the primary driver of the maize price spike.

Maize Prices Climb on Ethanol Demand

Maize, the single largest ingredient in poultry feed, now trades at around ₹30 per kg — up from approximately ₹22 per kg a year ago, a jump of nearly 36%. Farmers attribute the increase to growing volumes of the grain being diverted to ethanol plants, a trend that reportedly began about two years ago but has intensified significantly this year.

Namakkal's poultry industry sources maize primarily from Uttar Pradesh, Bihar, and Karnataka. The sector has not yet hit an acute shortage, but farmers warn that supplies could come under pressure if ethanol procurement continues to rise. Adding to concerns, industry representatives allege that certain traders are deliberately withholding stocks to engineer artificial scarcity and push prices higher.

Feed Supplement Costs Spiral Across the Board

The crisis extends well beyond maize. Prices of virtually every major feed ingredient have risen steeply over the past year. Soya, previously priced at around ₹30 per kg, is now selling for ₹60 or more — a doubling in cost. Phosphorus, an imported mineral critical to poultry nutrition, has tripled from roughly ₹30 per kg to ₹90 per kg.

Essential amino acids used in feed formulations have seen even steeper increases. Lysine and methionine — both vital to bird health and productivity — have surged from approximately ₹150 per kg to around ₹800 per kg, a more than fivefold rise. A significant share of these supplements is imported from China, and industry representatives have linked the price escalation to higher shipping and freight costs stemming from disruptions associated with the Gulf conflict.

Farmers Selling Below Production Cost

Despite ballooning input costs, farm-gate prices for eggs and broilers have not kept pace. The farm-gate price of an egg currently stands at approximately ₹5.20, while the estimated production cost is close to ₹5.50 — meaning farmers are absorbing a loss of roughly 30 paise on every egg sold.

Broiler producers are in an even more precarious position. The farm-gate price of broiler chicken is around ₹80 per kg, well below the estimated production cost of ₹110 per kg, translating to a loss of ₹30 per kg on every bird sold.

Seasonal Demand Slump Compounds the Pain

Egg demand has weakened further during the Shravan month, when a large segment of consumers traditionally abstain from non-vegetarian food. This seasonal dip has added downward pressure on already-depressed prices. Farmers are hoping that consumption picks up with the arrival of winter, when egg demand historically strengthens. However, if feed costs continue their upward trajectory, any seasonal price recovery may not be sufficient to restore profitability.

The situation in Namakkal is a stress test for India's broader poultry sector, and without policy intervention — whether through regulated maize allocation, import duty relief on feed supplements, or minimum support price mechanisms — the financial strain on farmers is likely to deepen.