British poultry producers are facing an uncertain future, with retailers insisting they use GM-free feed at a time when supplies are dwindling and prices are soaring. If this stand-off continues producers may end up losing significant amounts of money through paying premium feed prices, or face losing their market for chickens and eggs.
Most of the UK’s non-GM soya comes from Brazil, which harvested 40% non-GM varieties this year – a volume which is likely to drop to just 20% next year, says Martin Humphrey, feed sales director at Humphrey Feeds. “There is a certain inevitability about where we’re going – there is less and less non-GM soya being planted in the world. As long as availability reduces, the premium will increase, and it will become harder and harder for the supply chain to accept that price.”
It is also becoming more difficult to keep GM and non-GM supplies separate, he adds. Cross-pollination in the field and shared handling facilities present myriad opportunities for contamination.
Certain elements in poultry feed are also already allowed to be from GM sources, including vitamins, enzymes, synthetic amino acids and oil, says Mr Humphrey.
Only one of the three main soya importers has guaranteed supplies of GM-free soya until next April, and it is struggling to get producers to commit to buying that far ahead. “They’re saying it is too expensive to keep feeding,” says Scott Wellcome, general manager of Bunge UK. “We might not have a UK market if my customers are losing money hand over fist.”
GM-free soya is trading at about £30/t over GM varieties, and that premium is only going to rise as availability tightens, he adds. Bunge is importing about 300,000t of non-GM soya this year, out of the total UK market of 800,000t.
Brazilian farmers will plant next year’s soya harvest this autumn, and will opt for whatever is most economic for them to grow, says Mr Wellcome. Although some will still choose to grow GM-free soya, they are increasingly moving towards GM varieties. Bunge is, therefore, not guaranteeing GM-free supplies from May 2009 onwards.
Soya meal is also just a by-product of the crop, which is primarily grown for oil, says Robert Newbery, chief poultry adviser at the NFU. The premium required to encourage farmers to plant GM-free varieties must, therefore, be significant. “The idea that this little problem in the UK is going to stimulate planting is just nuts. The situation is getting more and more crucial.”
GM-free soya is adding about 5% to the cost of feed, which makes up half the cost of a chicken. With chicken taking about 40% of the UK meat market, that 2.5% increase in cost becomes a significant amount, says Mr Newbery.
Retailers are also not passing back required price rises to cover this and other increases in producers’ costs. “In the coming years retailers will be forced to sell chicken which has been fed on GM soya.”
All the retailers can see that there’s a problem, but no one’s prepared to take the lead in addressing that problem. Rather than wait for the inevitable to happen, retailers should take a proactive view and work with the industry to lift the moratorium on GM poultry feed, says Mr Newbery.
By removing the necessity for all poultry to be fed on GM-free feed, organic and specialist producers would be able to continue sourcing non-GM supplies at reasonable prices, says Mr Newbery. “But diverting GM-free feed to all poultry will make it difficult and expensive for organic and specialist producers with GM-free policies to continue.”
Even the government has recognised the difficulties of sourcing non-GM animal feed, with EU licensing of GM varieties falling way behind US approval, which puts further pressure on imports of both GM and non-GM feed. “If imports were highly constrained or expected to become so, the pressure to maintain supplies would increase the risk that feed coming to the UK might inadvertently or even deliberately be wrongly labelled as non-GM, when in fact either approved or non-approved GM material is present,” said a recent report by the Cabinet Office.
Not only would this knock consumer confidence, it would have significant cost implications in the form of product recalls, disposal and consumer advice. The Cabinet Office has, therefore, called for DEFRA to work with the Food Standards Agency to analyse the potential impacts on the livestock sector of global trends in GM production, and the EU’s approval system.
“These include potential impacts on the integrity of the regulatory system and on livestock production, including the risk that additional costs will be imposed on producers that will ultimately impact upon the price of food,” said the report. “The government will continue to lobby the EU to improve the regulatory regime for GM products – including speeding up decisions on the import of GM feedstocks, without prejudicing safety.”
THE RETAILERS’ VIEWS
A BRC spokesman told Poultry World: “The use of non-GM feed is a well-established practice for poultry suppliers to the main retailers and all expectations are this trend will continue. Retailers are well aware of the cost pressures suppliers are under and will reward them accordingly.”
According to a Sainsbury’s spokesperson, “Although there have been decreasing amounts of certified non-GM soya produced, there are still more than enough volumes to satisfy the UK poultry industry’s needs. The real issue is about cost impact, not availability.
“Smart feed buyers will place contracts at the start of the growing season to procure their non-GM feed supplies – this virtually guarantees supply for the year ahead. There is a reluctance to do this, but all the major suppliers of feed foresee adequate supply to meet UK demand of non-GM soya.
“We are in constant dialogue with our suppliers concerning the cost of production, as well as any increased costs that we have to absorb as a retailer. We will continue to take into account market pricing when negotiating with our suppliers on cost going forward,” said the spokesperson.
“It has always been the intention to move gradually towards non-GM feed in other livestock sectors, however this is a gradual and slow process. The slow pace of this conversion does not mean that it would be acceptable for the only sector with an exclusively non-GM position to move ‘backwards’.
“Although there is always a need to be mindful of the influence of external events and circumstances, our customers’ needs are our priority and there are no plans to move from this position.”
“Asda has no problems accessing GM-free soya and we don’t anticipate any issues with regard to poultry feed. With regard to the wider issue of GM, we are open minded about GM technology, but until the benefits to the end consumer are clearly demonstrated, be that more food security through better use of land, improvements in health, or lowering the cost of living, we are not going to take the lead.”
The retailer added: “It is not for supermarkets to make that case, but for expert scientists and government. As always, the products we sell will reflect the views of our customers.”