PD Hook predicts better times ahead for chicken sector

The broiler sector is close to securing price rises from the main supermarkets to cover the recent hikes in feed costs, which could signal the start of better times ahead.

That was the view of James Hook of PD Hook, in his keynote speech at the Chicken 2007 Conference held at Stoneleigh Park, Warwickshire in mid September.

He kicked off acknowledging the current pain being experienced by broiler businesses. “With the broiler industry facing challenging times, the first thing the industry must establish is do we think as poultry farmers, we have a future?

“I believe farmers have a future and that things have been swinging their way in the past 12 months.”

He highlighted how retailers were now wanting to stock British poultry. “We are definitely wanted.”

But with the industry in such a perilous state, the question that many have been asking is which direction will the sector go. “Will production fall from the current 15m a week to 12m or will it rise to 19m?”

Thanks to British Chicken Marketing and the work of Sally Gunnell, he believes production will in fact increase, not decrease as many fear.

Looking at the current feed price crisis, he praised Tesco for leading the way in agreeing to raise prices by 10% to pay for the recent feed rise. He reported that the other retailers are moving to follow suit.

“There is no way anyone in the sector can absorb the soaring feed price inflation. Hatcheries, breeders and broilers all need more money or we will see production stop. And it is a whole world situation.

“The good news is that retailers now recognise that an increase is needed for feed.”

Controversially, Mr Hook went further by suggesting that the recent feed price problems could be good news, as arable farmers now have a margin and everyone can increase prices and have a margin.

“We are about to have our day – for far too long, we have been under paid and should not be afraid to make a profit.”

Peter Morgan, of O’Kane Poultry agreed prices had been too low. He showed delegates figures which showed that back in 1996, producers were getting 56p/kg and in 2005, it was 52p. “However, assuming an inflation rate of 2%, the price should now be nearer 90p/kg.”