The increasing cost of inputs is pushing more and more poultry producers into the red, with one in four poultry businesses now making a loss, market research firm Plimsoll said in its latest report.
“Whether it’s fuel, materials or wage demands, every company in the UK poultry industry is being squeezed. Sixty per cent of companies have seen their gross margin fall in the latest year,” said report author, David Pattison.
“Unfortunately, many are reluctant to pass on price rises for fear of losing customers to cost savvy competitors. However, falling profit margins across the industry is the first warning sign that this strategy has become unsustainable.”
Mr Pattison said that over the past two years the average profit margin in poultry had fallen to 3%, with 216 companies losing money. Unless their fortunes change quickly, most will soon have no money left to conduct business.
On a more positive note, the report does show 356 companies in UK poultry increased their profits, while a further 584 companies managed to remain in profit despite increased costs.