Egg contracts prove a profitable investment

In search of a new farming enterprise after selling off his large arable unit, James Holloway attended the Pig and Poultry Fair in 2004 with one thing in mind – sourcing a profitable contract for free-range egg production.

“Although a new farm hadn’t been found at the time, I decided finding the right contract was more important and, with free-range egg production offering the greatest value in the livestock sector in terms of commodity prices, it seemed a good option,” explains Mr Holloway who currently runs a 12,000-bird unit in Northampton.

Throughout the initial stages, Mr Holloway has received help from Deans Foods, the company he secured a contract with.

“They have helped from the beginning offering husbandry, management and financing guidance.”

But although the figures appear to be stacking up so far, Mr Holloway admits there is a huge investment involved when setting up.

“The one shed we put up cost nearly £250,000 and planning permission can sometimes be tricky, so it’s important anyone looking to start free range does their research before buying the farm or attempts to put buildings up.

“And then there’s the extra legislation to consider, with regular assessments and audits for Freedom Food and the Lion Code.”

But he says this method of assessment is vital for UK producers to protect themselves from imports.

Although still in his first year Mr Holloway is looking to expand in the future.

“Our first flock went in at the start of this year, so once a full production cycle, which usually lasts 13-14 months, is over, we will be able to assess the figures and decide whether expanding is a profitable option.”

But he admits egg prices have suffered slightly since he first started production, in line with market pressures.

“It might, therefore, be better for us to expand and cover economies of scale,” he reckons.

For this year alone, Mr Holloway is on target to produce 300 eggs a bird, but he reckons there is scope to run three sheds on the 50ha (120-acre) unit with up to 44,000 birds in total.

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