2013 outlook: Poultry

What does 2013 hold for UK farming? Farmers Weekly and farm business consultant Andersons have teamed up to provide an outlook. Today we look at poultry. 

The demand for poultrymeat continues to be strong as hard-pressed consumers look to cheaper meats.

This has allowed retail and farm-gate prices to increase, and to some extent has offset the large cost rises faced by the sector. The feed cost for a broiler unit can be 70-80% of total costs, says Andersons consultant George Cook.

In the egg sector, the supply balance has been restored after the turmoil of oversupply in 2011 created by the then imminent EU ban on unenriched cages. Egg prices have increased from the trough seen in late 2011.

Like all intensive livestock sectors the main issue for the latter part of 2012 has been feed costs. This will continue to be the key factor through into 2013. Those who can forward-buy on the open market should keep a close eye on commodity values and strike a deal when the price looks right, advises Mr Cook.

“There were opportunities this season to lock into forward prices well below current levels, and there will be again.”

Key points and management advice

Strong demand for competitive poultrymeat has offered higher prices

Environmental requirements could bring efficiency improvements

Forward-buy to lock into lower feed prices

Turn environmental regulation requirements into a useful management aid

Niche outlets need good marketing

The unsupported pig and poultry sectors face some of the most stringent environmental legislation. However, this could be turned to advantage, Mr Cook believes.

“The Environmental Permitting Regulations 2010 require the use of best available techniques to prevent or reduce emissions to air, land and water on large units. The required timetable of improvement and ongoing monitoring should lead to improvements in resources and their use, as well as a reduction in and better use of waste products.

“This could prove to be a very useful management aid, helping to improve profitability, even taking account for additional capital investment.”

Although large producers will continue to dominate, several smaller producers are finding added value niches producing free-range or high-welfare birds, says Mr Cook. Some egg producers are also selling surplus eggs into local markets. “This requires good marketing to develop outlets. Promotional activity is at least as important as production.”

Commentary based on Andersons’ Outlook 2013

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