22 Aug 2025
Three Acre Farms’ revenue drop shows poor demand
The company’s revenue in the June 2025 quarter declined primarily due to reduced demand for both broiler and layer DOCs.
The revenue of Sri Lanka’s poultry company Three Acre Farms dropped 27% to USD 4.09 million in the June 2025 quarter because farmers reduced purchases of DOCs as prices dropped.
Chief Executive Cheng Chih Kwong said the company’s revenue during the quarter under review declined compared to the same quarter last year, primarily due to reduced demand for both broiler and layer DOCs.
“The decline was mainly caused by reduced inputs by farmers at the beginning of the quarter due to lower live bird prices and continued volatility in the table egg market,” he revealed.
Economic situation and its impacts
Sri Lanka’s chicken and egg prices soared in 2022 as macroeconomists created a forex shortage by cutting rates with printed money to boost growth and inflation, according to a report by Economy Next.
DOC and grain prices also soared. Sri Lanka’s chicken farmers culled their stocks when the Consumer Affairs Authority (CAA) slammed price control, as macroeconomists destroyed the internal and external value of the rupee, using their money monopoly.
Though broiler production recovers quickly, it took almost two years for farmers to rebuild their stocks from the hit given by macro-economists and the CAA.
However, in 2023 and 2024 the central bank has operated largely deflationary policy under an IMF program which made it sell-down its domestic assets which has allowed the rupee to be strong, and the agency lost the ability to create inflation.
Under the revised IMF program, however, it is no longer required to sell-down its domestic assets, and the agency had got the power to active ‘monetary policy’ again, which analysts have warned can lead to a second sovereign default.
As farmers rebuilt their flocks, initially paying very high prices for DOCs, egg prices began to drop, leading to some farmers not expanding stocks and reducing their farms, according to industry officials.
Meanwhile, Three Acre Farms said it had cut prices of layer and broiler DOCs further reducing revenues.
Companies must boost productivity if the central bank stops giving free profits by increasing the cost of living.
High import duties
Sri Lanka has potential to build an export industry in exporting eggs and other poultry products, but the sector is constrained and due to high import duties and licenses on corn which makes raw materials too expensive, said analysts and industry officials in the report.
The massive import taxes on grains, including rice, has kept food prices sharply above the world, while corn taxes have promoted protein malnutrition among children of poor families.
The so-called ‘corn mafia’ which promotes import duties and licensing at the cost of protein malnutrition has a history growing back three decades involving regional and national level political corruption linked to grain purchasing, insiders said.
The ‘self-sufficiency’ and ‘import substitution’ strategies which exploit the poor are also justified based on forex shortages created by macro-economists as the ‘cut rates’ with inflationary open market operations and other liquidity injections.
