Analysis Meat

Turkey wants to keep meat price under control

May 6, 2024 - Matthijs Bremer

That Turkey is struggling with significant inflation is widely known. Meanwhile, the price of meat is rising much faster than the overall inflation. With government intervention, the country is trying to get the meat price under control, although according to the United States Department of Agriculture (USDA), it is precisely government intervention that has caused the situation to derail.

On the Turkish branch of CNN, it can be seen that the price of chicken in Turkey has increased by 172% since the rise began in December 2023. That is an average of all parts. The increase in individual parts even reaches around 200%. This increase shows no signs of slowing down. In March alone, the price of chicken meat increased by 16.2%. According to Turkish media, it is not uncommon for consumers to pay more than 382 lira (around €11 at current exchange rates) per kilogram for whole chickens.

Not only is the price of chicken meat rising significantly. Over a period of three months, the price of meat on average increased by about 40%, as reported in Turkish agricultural media. Particularly higher prices of beef are driving up poultry meat prices. Earlier this year, consumer prices rose to around 643 lira (€18.50) per kilogram after an 83.4% increase in beef prices. The price of lamb meat rose the most. Over a period of a year, the price of this type of meat increased by 118%.

Low Imports
An important reason for the high Turkish meat prices is ineffective agricultural policy, as indicated in a report by the USDA. The report states that the Turkish livestock is too small to meet domestic demand. Import is traditionally strongly discouraged to protect the domestic sector. In April, the government reportedly reluctantly started a program to import livestock, although according to the USDA, this is just a drop in the bucket.

It is not surprising that the Turkish Ministry of Agriculture sees further regulation as the solution. Given the high level, the Turkish government decided to set a maximum price of 324 lira (€9.29) per kilogram of beef in Istanbul and Ankara during Ramadan. To curb meat prices, the country also decided to cap the export of chicken meat. Starting from May 1, the export will be limited to 10,000 tons per month. According to Minister of Agriculture Ibrahim Yumaklı, there is widespread abuse of scarcity, and 'opportunists are driving up the price'.

Allowing more imports seems to be the most logical way to lower meat prices, but it remains to be seen to what extent the meat sector wants to trade with the country. Turkey has been struggling with significant inflation for years, making imports more expensive. On Thursday, May 2, one Turkish lira was worth approximately €0.029. A year ago, it was €0.046. This represents a 0.37% decrease in the value of the currency. Five years ago, one lira was even worth €0.15. This means the lira has depreciated by 80.7% in value.

Rising Production
Data from the Turkish Statistical Institute (TSI) suggests that the government's import program is succeeding in boosting meat production. Beef production in Turkey increased by 6.2% in 2023 to 1.67 million tons, according to TSI data. However, poultry meat production decreased. In 2023, the country produced 2.33 million tons of poultry meat. However, there was a significant decline in poultry meat production that year, a decrease of 5.6% compared to the previous year. In 2022, 2.47 million tons were produced. Production did recover in the first two months of 2024. Compared to the same period a year earlier, chicken meat production increased by 10.1% to approximately 405,000 tons, according to TSI data.

However, the reliability of this data from the Turkish government is questionable. Controversial methods are reportedly being used in Ankara to curb the rise in meat prices. It is reported in Turkish media that horse and donkey meat are being sold as beef on a large scale in the country. Fraud is widespread, especially in processed products. This was known to the Turkish Food and Drug Administration. However, the findings were swept under the rug to conceal the severity of the scarcity. Whether the data is accurate or not, one thing is clear: the high prices indicate that government intervention has not yet managed to tame the market.

Matthijs Bremer

Matthijs Bremer is a market specialist in pork, beef, and poultry meat at DCA Market Intelligence. He also monitors the protein transition, keeping an eye on developments in cultured meat and meat substitutes.