Indonesia Plans New Poultry Farms to Ease Egg and Chicken Prices as Free Meals Expand

New farms planned where poultry prices are highest

Indonesia plans to build more farms for chickens raised for meat and hens kept for eggs in provinces where prices exceed government reference levels. Agriculture Minister Andi Amran Sulaiman says the government will identify expensive markets and bring production closer to them, as the national free nutritious meal program increases demand for two widely consumed sources of protein.

The program is expected to require an additional 1.1 million tons of chicken meat and 700,000 tons of eggs once fully rolled out. The Agriculture Ministry also projects that new farms and related activities could create up to 1.4 million jobs. The push combines three goals: feeding the meal program, keeping household food costs manageable, and spreading poultry production more evenly across Indonesia.

October 2025 inflation figures show why the government is focusing on these foods. Statistics Indonesia reported that egg prices rose 4.43 percent from September, adding 0.04 percentage points to monthly headline inflation. Broiler meat, meaning meat from chickens raised for consumption, increased 1.13 percent and added another 0.02 percentage points. Together, the two foods contributed 0.06 percentage points.

Bank Indonesia's food price dashboard showed eggs selling for between 28,000 and 29,900 rupiah per kilogram in West Sumatra, South Sumatra, Banten, and Yogyakarta. The National Food Agency's farmer level reference price, set in Regulation No. 5/2022, is 26,500 rupiah per kilogram.

Those market prices were 1,500 to 3,400 rupiah above the farmer reference, equivalent to about 5.7 to 12.8 percent. The reference applies at the farmer level, while market prices also reflect the costs of moving and selling eggs. The government maintains a separate consumer reference to guide retail expectations. Persistent price pressure can reflect tight supply, higher production costs, or both.

Free meal kitchens bring more buyers into local markets

Nutrition Fulfillment Service Units, known locally as SPPG kitchens, buy eggs and chicken from nearby markets and retailers for the free nutritious meal program. Their regular purchases are adding a large institutional customer to markets that already serve households and other buyers.

Store shelves are not empty, but more buyers are competing for the same products. As kitchens take a greater share of local supplies, the pressure appears in weekly price movements and in the volatile food category of the inflation report. This category covers foods whose prices can change quickly from one month to the next.

Pudji Ismartini, deputy for distribution and services statistics at Statistics Indonesia, described the change in demand since the meal program began several months earlier and its relationship with October's price movements.

"Demand for the two commodities has risen sharply since the program began, and eggs and broiler meat were the main drivers of inflation in the volatile food category in October," Pudji Ismartini said.

Statistics Indonesia does not calculate a precise share of inflation attributable directly to the meals program. The timing of stronger demand nevertheless coincides with the rollout and with rising egg and chicken prices. Several provinces are experiencing the same pressure, prompting the government to consider adding production nearer to the kitchens and households buying these foods.

The extra demand also changes the purpose of existing poultry surpluses. Supplies that previously provided a small cushion between national production and consumption are expected to be absorbed as more kitchens open. Keeping prices steady therefore requires attention to both the amount produced and where that production reaches buyers.

How the ministry intends to choose farm locations

The Agriculture Ministry plans to map districts and cities with the widest gaps between market prices and reference rates. It will then establish layer farms, which produce eggs, and broiler farms, which raise chickens for meat, in areas where additional local supply could ease prices.

Andi Amran Sulaiman, the agriculture minister, described the proposed approach in direct terms.

"We will identify wherever prices are high and establish poultry farms there," Agriculture Minister Andi Amran Sulaiman said.

Parts of Sumatra and Yogyakarta, where prices already exceed the farmer level reference, are likely candidates. Production concentrated in Java can leave distant markets facing additional transport costs. Disruptions along those routes can quickly reach retail prices. Farms closer to consumers can shorten journeys, reduce the risk of spoilage, and increase competition among local suppliers.

The ministry has not published a complete construction timeline. Projects need access to land, environmental clearance, disease prevention planning, and dependable connections to feed suppliers and hatcheries before birds can be placed. These preparations can take months, although companies with established supply networks may expand or repurpose existing facilities more quickly.

The sequence of demand, supply measures, and price readings places the November 7, 2025 announcement in context:

• Earlier in 2025, officials outlined plans to expand SPPG kitchens from about 2,000 in operation to 6,000 and then 8,000 by August 2025.
• During the third quarter of 2025, domestic corn prices increased before easing following stock releases.
• In October 2025, egg prices rose 4.43 percent from the previous month, while broiler meat rose 1.13 percent.
• As of November 7, 2025, the ministry was proposing new farms in expensive markets, alongside measures to ease feed costs and expand poultry output.

Feed costs are putting pressure on producers

Feed is the largest single input in poultry production, and tight domestic corn supplies have made it more expensive. Corn prices rose during the third quarter and later eased after stocks were released, but remained high compared with imported grain.

The government is distributing 52,400 tons of corn at subsidized prices to limit increases in feed costs. Berdikari, a state affiliated livestock company, also plans to import 600,000 tons of feed wheat in 2025. The wheat would help feed mills blend rations while waiting for the next major corn harvests.

The National Food Agency, known as Bapanas, presents the corn program as support for egg and chicken producers and a way to protect consumers from production costs being passed into food prices. Arief Prasetyo Adi, head of Bapanas, explained the intended connection between cheaper feed and steadier poultry prices.

"The affordable cost of feed will stabilize egg prices and, as a result, keep the cost of chicken meat under control. The program will ensure sustainable egg production by the end of this year," Arief Prasetyo Adi said.

Broiler farmers in several regions have also faced higher prices for chicks, live birds, and feed. A farm needs all three parts of the production chain to work: chicks to raise, feed to keep them growing, and buyers for the finished birds. Adding buildings alone will leave these operating pressures in place.

Hatchery supply is often managed through placement limits intended to balance poultry availability and prices received by farmers. Relaxing those limits could increase output more quickly. The decision must be matched with disease prevention capacity, vaccination coverage, and sufficient market demand, so increased production does not lead to disease losses or collapsing farm prices.

Small surpluses face a much larger demand increase

The Agriculture Ministry says Indonesia has reached self sufficiency in chicken meat and eggs, with reported surpluses of about 0.12 million tons of meat and 0.17 million tons of eggs. Self sufficiency means domestic production can meet domestic needs at the demand level being measured.

The Directorate General of Livestock and Animal Health has kept annual chicken meat output near 4.2 million tons and egg output near 6.5 million tons, with small surpluses in both. Officials said supply could expand ahead of the meal program's peak rollout in 2025, while expecting those surpluses to be absorbed as more SPPG kitchens opened.

The expected additional requirement of 1.1 million tons of chicken meat is about 26 percent of the stated annual output of 4.2 million tons. The extra 700,000 tons of eggs is about 11 percent of annual output of 6.5 million tons. These comparisons show the size of the planned demand increase relative to the production figures officials gave.

The additional meat requirement is also more than nine times the reported meat surplus of 120,000 tons. The extra egg requirement is a little over four times the reported egg surplus of 170,000 tons. The existing production cushion is therefore much smaller than the demand expected from a fully operating meal program.

Officials had outlined an expansion from about 2,000 operating kitchens to 6,000 and then 8,000 by August 2025. That planned increase would direct more regular institutional purchases into local markets. The poultry response combines new farms with the option of allowing more chicks into production.

More chicks could increase output, but farms need preparation

Agung Suganda, Director General of Livestock and Animal Health at the Agriculture Ministry, identified changes to chick production limits as one option for meeting growing demand. Day old chicks are newly hatched birds that farms buy and raise.

"We will soon invite all poultry industry stakeholders to discuss strategies and prepare for the expansion of SPPG kitchens. If we fully lift the day old chick production limit, national distribution could reach 90 million chicks per week," Agung Suganda said.

The proposed discussion with poultry businesses would address how to prepare for more kitchens and higher demand. Increasing chick distribution can raise the number of birds entering farms, but those farms also need feed, suitable housing, veterinary support, and a route to market.

New facilities take time to build. Once permits are secured, construction of enclosed poultry houses, ventilation, feeding and watering equipment, and manure handling systems typically takes several weeks to a few months for sites of medium size.

Integrated companies, which already manage connected parts of the poultry business, can move more quickly by adding houses or adapting older buildings. Smallholder cooperatives can also increase production, although financing and technical support are often necessary to meet standards for disease prevention and temperature control.

The practical task is to align each stage. More chicks need enough farm space, larger flocks need sufficient feed, and additional meat and eggs need reliable collection and distribution. The ministry's location strategy aims to bring these supplies closer to the markets experiencing the strongest pressure.

Jobs and support for smaller farmers

The ministry expects about 1.4 million jobs across farming, feed deliveries, chick supply, processing, cold storage, and retail logistics as projects move from permits into production. This is a projection covering the wider poultry supply chain, rather than just work inside chicken houses.

Amran has presented the expansion as part of a people centered economy and the Pancasila economy promoted by President Prabowo Subianto. The employment goal makes the participation of smaller farmers an important part of the plan, alongside the capacity of large poultry companies.

Indonesia's poultry sector combines large integrated businesses with a broad network of smallholder growers. Large companies control feed mills, hatcheries, farms, and processing operations, and have easier access to credit and modern housing. Smaller growers have fewer resources and depend on local traders for feed, chicks, and access to buyers.

Higher feed costs, heat stress during longer hot spells, and uneven disease prevention can hit small farms especially hard. A small increase in bird deaths or a slowdown in growth can erase their profit margin. Measures already used in Indonesia and similar markets can help smaller producers expand:

• Credit for enclosed poultry housing that improves temperature control and the amount of feed needed for growth.
• Reliable access to chicks and feed at transparent prices through producer groups or cooperatives.
• Training, veterinary services, and vaccination support against avian influenza and Newcastle disease.
• Cold storage and refrigerated transport to reduce meat losses in hot regions.
• Affordable financing for housing and equipment designed to cope better with climate conditions.

Some provinces already have these forms of support. Expanding them where new farms are planned could reduce the gap between large companies and small growers, lower disease risks across nearby farms, and help additional production reach consumers at lower prices.

Housing technology could improve farm efficiency

Indonesian poultry producers are changing their housing systems to improve efficiency and respond to animal welfare debates. Many layer farms are moving toward aviary systems instead of cages. Broiler producers are investing in cages arranged across several tiers, allowing more birds per square meter while maintaining airflow and litter management.

Closed house technology uses enclosed buildings with automated feeding and cooling. Fans and evaporative cooling, which lowers temperature through the evaporation of water, can reduce heat stress and deaths during hot months. More stable conditions also help birds maintain growth.

Feed conversion is a central measure of efficiency: it describes how much feed is needed to produce a given amount of growth. Better temperature control and feeding systems can improve that performance, reducing the cost of producing each kilogram of chicken.

These upgrades require substantial investment. Partnerships among large poultry companies, banks, and smallholders can help finance them. Farms adopting suitable systems from the start may lower their costs per unit and keep supplies steadier during weather shocks that are becoming more common.

Equipment choices also need to fit the wider production plan. Housing, ventilation, cooling, feed delivery, and manure management all contribute to a farm's ability to keep birds healthy and deliver a dependable supply. Smaller operators often need both financing and technical guidance to install and operate these systems.

What higher poultry prices mean for household budgets

Eggs and chicken are central to Indonesian diets and provide protein at more affordable prices than beef and fish. Because many households buy them every week, even modest price increases can influence the inflation index and leave families with less money for other needs.

Headline inflation reached 2.86 percent year on year in October 2025. The food, beverages, and tobacco group increased 4.99 percent, with red chili peppers the largest single driver of that group's annual rise. Poultry price pressure was part of a wider movement in food costs.

Eggs contributed 0.04 percentage points to monthly headline inflation and broiler meat contributed 0.02 points. Percentage points measure how much an item adds to the inflation rate, while the 4.43 percent egg price increase and 1.13 percent meat price increase describe changes in the prices themselves.

The combined contribution matters most to households that spend a large share of their budget on food. Several staples becoming more expensive at the same time can make weekly shopping harder, even when the movement in the national inflation index appears modest.

The government's response addresses two connected pressures. Building farms closer to expensive markets aims to improve local availability and reduce transport costs. Subsidized corn and planned wheat imports aim to reduce the cost of feeding birds. Changes to chick limits could provide another route to greater output, provided farm capacity and demand grow together.

The central challenge is to keep the meal program supplied while protecting both consumers and producers. New production must reach the places where prices are high, and farmers need operating costs and selling prices that allow them to continue raising birds. The ministry's proposals bring farm locations, feed supplies, employment, and kitchen demand into the same production plan.

At a Glance

• Indonesia plans new broiler and layer farms in provinces where egg and chicken prices exceed government reference levels.
• The fully rolled out free nutritious meal program is expected to need an additional 1.1 million tons of chicken meat and 700,000 tons of eggs.
• Egg prices in West Sumatra, South Sumatra, Banten, and Yogyakarta ranged from 28,000 to 29,900 rupiah per kilogram, compared with a farmer reference of 26,500 rupiah.
• October egg prices rose 4.43 percent from September and broiler meat rose 1.13 percent, together adding 0.06 percentage points to monthly headline inflation.
• The Agriculture Ministry projects about 1.4 million jobs across poultry production and related supply activities.
• A government program is distributing 52,400 tons of subsidized corn, while Berdikari plans to import 600,000 tons of feed wheat in 2025.
• Officials say lifting chick production limits could allow national distribution to reach 90 million chicks per week.
• Reported annual output is near 4.2 million tons of chicken meat and 6.5 million tons of eggs, with surpluses much smaller than the meal program's expected additional demand.
• New farms require preparation and construction, while smaller growers need financing, technical support, and reliable access to feed and chicks.