The average broiler producer is currently making a 2.7% loss on every bird, and unless more cash is passed down the food chain, producers will stop rearing birds, the NFU has warned.
At the British Pig and Poultry Fair held at Stoneleigh Park, Warwickshire, earlier this week, NFU chief poultry adviser Rob Newbery revealed the results from a survey that shows production costs in the chicken meat sector have risen by nearly 25% (14p/kg liveweight) in the past year alone.
But the same survey shows that prices paid to producers have not kept pace. In fact, says the union, the average producer has not made a profit at any point over the past three years.
Meanwhile, a separate British Marketing Survey shows strong consumer demand, with more than 70% of consumers actively seeking to buy assured British chicken.
Mr Newbury added: “Consumer tastes are changing and producers are ready and willing to produce what they want to buy. But to be able to keep up with these changing demands, producers must receive enough money to ensure their businesses are sustainable.”
Gloucestershire-based chicken producer and NFU poultry board chairman Charles Bourns told Farmers Weekly this did not necessarily mean households had to pay more for chicken.
“There is sufficient money already in the food chain, but not enough is being passed back to producers. Look at super roasters – they were in shops at £5 last year and now they are at £7.”
Mr Bourns said poultry producers were becoming more likely to close their doors to new flocks.
“High feed prices mean the potential loss with a bad flock is greater, so producers are becoming more business-like in their decision-making. The poultry industry is not a bottomless pot of money.”
One impact highlighted by Mr Bourns is that the industry does not have the money to invest and take advantage of the increasing demand for free-range.
“We already have imported free-range poultry on supermarket shelves, as supply cannot meet the surge in demand,” he added. “Demand is likely to continue as the chef [Hugh Fearnley-Whittingstall] programmes return later this year and they are likely to keep pushing free-range.”
- Typical cost of production is 69.9p/kg liveweight
- Typical price received is 68.1p/kg liveweight
- Typical margin is a loss of 2.7%