A number of West Country free-range broiler producers have lodged claims against poultrymeat processor 2 Sisters, following what they describe as a retrospective price cut.
Chairman of the West Country Free-range Farmers co-operative, Bob Shipley, said at least five of his members had taken this action when their returns dropped by an average of 6p a bird.
“Our contract says we should have two crops’ notice before any changes are made. But my birds were slaughtered on 15 February and when payment cleared on 25 February, there was an arbitrary deduction of 6p,” he told Poultry World.
Mr Shipley, who produces 36,000 birds for Hook 2 Sisters, said he had previously been warned of a 12.3p a bird reduction, so the 6p drop was better than expected.
But he is angered that free-range producers are facing a deeper cut than standard broiler growers, and also points to price rises that have occurred for free-range chicken in supermarkets.
One of the co-op members to have lodged a claim against 2 Sisters is Judith Taylor, who produces Hubbard 87 free-range broilers on an eight-week production cycle near Tiverton in Devon.
She said the price for birds she placed in mid-December had fallen from 78p a bird to 72p a bird, amounting to a £783 loss of revenue. This is the sum she is claiming in the county court.
“We have 47 members of the co-op and we fear that the cut will force some out of business, leading to lost jobs in the area,” said Mrs Taylor.
A statement from 2 Sisters said the company was still in negotiation with free-range farmers in the south west, but rising commodity prices had created challenges for everyone.
“The supply chain has absorbed most of the cost increases, but now we’ve asked our producers for some temporary help by accepting a one-off cut to share the pain,” said a 2 Sisters spokesman.
“Had we been able to pass on all these cost increases at retail level, it would simply turn people away from free-range and there would be less need for free-range producers.”
Standard producer cuts
Hook 2 Sisters has also imposed a cut of 1p/kg on its standard broiler producers for their next two crops.
NFU board chairman, Charles Bourns, is one of the affected producers, and he told Poultry World that while the cut was unwelcome, it was described as “temporary” and did not affect the feed price ratchet.
“Sometimes you have to be realistic. Hook 2 Sisters has been honouring the ratchet all winter and it’s been very difficult for them to get it back from the market. I’d prefer to lose a bit now than see the ratchet go for good.”
It is also understood that Cargill has cut prices by the same 1p/kg from 7 March for “As hatched”, “Large Bird” and “Free Range” contracts. “We haven’t been able to recover all the costs increases we have seen over recent months,” said an accompanying letter.