Inghams Switch to Nitrogen

The CO2 (Carbon Dioxide) shortage which started around November ’22 has heavily impacted meat and poultry processors who use CO2 gas in their packaging, egg processing and slaughtering operations. The shortage was brought on by the closure of the country’s sole food-grade CO2 production facility. The cost of CO2 is around10 times more than it was this time last year and due to shortage, it has been severely rationed.

During December and January major poultry processing company Inghams, who have several processing plants nationwide, were challenged with the significantly rationed supply of CO2 which resulted in plants being temporarily shut down, this impacted production volumes significantly. Faced with uncertainty around CO2 supply Inghams have concerted its processing plants to nitrogen.

The company reports a 55% fall in net profit and stated that New Zealand’s core poultry volume declined 2.4% as it adjusted egg settings in response to significant labour shortages and CO2 supply constraints. They also said that inflation was impacting them in several ways with the cost of inputs rising - such as fuel, transport, chicken feed and packaging. Feed costs alone had increased by A$57.9 million compared to the previous corresponding period.

The company stated that it has implemented initiatives to address reduced farming performance, with more chickens expected to become available later in the year and that poultry has an advantage over red meat because it’s cheaper and that their expectations were that things would begin to pick up moving forward.