The UK chicken industry will not survive unless it gets a substantial price rise from retail customers, industry leaders have claimed.
A new report, prepared jointly by the NFU and British Poultry Council, maintains that most poultry meat businesses are making a loss of over 6p/kg, or £25,000 a flock per year.
With each chicken farmer typically rearing six flocks a year, the sector needs a rise of 12p/kg to maintain the long-term viability of farm-assured Red Tractor chicken.
“This is a really critical time for the poultry industry,” said NFU president Peter Kendall, launching the report British Chicken – What Price?
at this week’s British Pig and Poultry Fair at Stoneleigh.
He said as product prices were squeezed and input costs soared, farmers were unable to modernise and invest.
“If we don’t get some form of commitment throughout the food chain to get better returns for poultry farmers, we will see very long-term damage to this sector.”
Since 2004, energy costs had gone up by nearly 70%, and day-old chick prices had risen by over 20% in the last year.
Over two years the price paid to farmers had dropped by 1.5p to average 48.5p/kg.
The report also cited three main factors that were making the British chicken industry, worth £3bn at retail level, especially vulnerable.
Downward price pressure in the supply chain had discouraged investment, and avian influenza had led to aggressive price promotions to maintain sales against surplus meat from other EU countries where demand had fallen.
The cost of implementing Integrated Pollution Prevention and Control Regulations was a further major concern.
“In its current financial state, the UK poultry industry quite simply is unable to meet any additional legislative costs.”
said Mr Kendall.