Food for Thought

Posting by Poultry World editor Richard Allison

One quarter of poultry producers believe they will stop production sometime in the next five years unless business conditions improve. That is the shocking finding from an exclusive survey carried out jointly by Poultry World and NFU.

Everyone recognises that many poultry businesses have been struggling for some time with higher cereal prices, but what is shocking is the scale of the problem and the total lack of confidence looking forward.

There is now a real risk that the sector could lose critical mass with few chick placings.

While there has been much focus on soaring feed costs, the survey also highlighted the mushrooming burden of legislation. Businesses have been hit by a succession of new rules which are adding costs. Most notably, last year’s implementation of Integrated Pollution Prevention and Control (IPPC) left many with huge bills and the egg sector now faces costs of new salmonella rules.

It’s no wonder that both egg and meat producers are lacking confidence when they cannot see beyond their current flock in terms of profitability.

Another worrying finding from the survey is the lack of succession with up to 61% of respondents with no successor. On a positive note, this offers a chance for new entrants, but again, a lack of confidence and hurdles, such as planning, stand in their way.

So what needs to happen?

I just don’t understand how DEFRA junior minister Lord Rooker can put his head in the sand over the 2012 cage ban.

It’s the pig sector all over again, with the government pushing ahead with welfare legislation regardless of whether other EU member states stick to the same timetable. And the result could be the wholesale export of the intensive egg sector.

We have also already seen it happen in Germany, who is phasing out conventional cages before other Member States. Producers simply moved production to neighbouring countries, mainly the Netherlands.

And it will happen in the UK if it unilaterally goes ahead with the ban in 2012.

DEFRA has to be realistic about the timetable of rehousing millions of birds in the UK. Whether switching to free range or enriched, it will require building new units just to maintain the UK flock size.

The NFU has issued some depressing figures which suggest that by Jan 2008 the average free-range egg producer will be losing £27,000 a year while broiler producers will be losing as much as £118,000/yr because of high feed costs.

When are retailers going to realise that the price has to go up?