Deadline for poultry cage ban puts pressure on producers

The huge cost of complying with the conventional cage ban became apparent at a recent producer meeting in Northern Ireland, with two producers putting their combined cost at nearly £60m.

Speaking at the recent Poultry Association of Northern Ireland Conference held at Loughry College, Cookstown, Charles Crawford of Erne Eggs questioned whether there was sufficient time left. “The 2012 deadline means that the last crop of pullets will go into this system at the end of next year.

“Current estimates indicate that 95% of cages south of the border [Republic of Ireland] are not enriched while the figure is 85% in the north. Therefore, we have a problem [in meeting the 2012 deadline] and have some major decisions to make. We must make them soon.

“We have no problems with enriched cages and they are undoubtedly a step forward. The big issue is the deadline.”

He stressed that the deadline “was an artificial distortion” to the market. “If the sector is unable to meet the deadline, there could be shortage of eggs with the gap being filled by imports.”

Scottish egg producer John Campbell of Glenrath Farms agreed. “Where will the eggs come from [to meet the shortfall]. The big, big threat is that the World Trade Organisation does not recognise animal welfare as a barrier to trade.” Therefore, the EU cannot stop eggs produced by hens in conventional cages in third countries being imported and sold.

Case study: Erne Eggs, County Fermanagh

Over the years Erne Eggs has continually upgraded equipment with the result that it now has 420,000 birds in conventional cages.

“It took 30 years to build up the production facilities and we are now being forced to spend money on houses and equipment which still have at least 15 years life left in them,” said Charles Crawford.

He said that the company had three options. “First we could go to a new greenfield site with three 140,000-bird houses. The advantage is there would be no disruption to current supplies and we could use existing production facilities right up to the deadline. However, this would cost about £8-9m and it means production moving away from the packing station, which means losing the benefits of an in-line packing system.

A big hurdle is that Mr Crawford has been unable to identify a suitable site that is not close to existing residents. “I can’t see them agreeing to 420,000 layers plus manure storage.

“Second, we could look at retaining existing buildings and replacing cages. If everything went to plan, we could be finished by end of 2011. This would cost less at £6-7m, but the big downside is that it would mean losing one quarter to one third of production, as each house is being converted.”

This would hit profitability at a time when the company was already being squeezed by the recession, he said.

The third option is to do nothing which has many attractions, “but our processing side would need to source eggs from elsewhere and supplies could be tight after the ban”.

He concluded by stressing that the final decision will ultimately depend on whether the banks will be willing to lend the money.

Case study: Glenrath Farms, Scottish Borders

John Campbell estimates that Glenrath Farms will have invested a total of £50m to comply with the conventional cage ban through a combination of installing new enriched cages and building a new free-range unit.

This includes the “Millennium” development where there will be five in-line houses with enriched colonies. The latest house to be built will hold 180,000 birds and this shed alone cost £2.5m with a another £4-5m to be spent in the next two years.

In addition, he has built the first of 10 planned high-rise multi-tier free range houses at the Bythbank site. But it hasn’t been without problems with a highly organised public opposition.

“Planning has been unbelievable. We have had unauthorised break-ins, stage managed demonstrations and even the manager had to take his kid out of a school because of the adverse publicity. And it is a free-range unit, not intensive.”

He is confident that he will be complying with the ban by the end of 2011. “These capital investments are a hell of a thought in what is needed to comply.”