Humphrey Feeds in the spotlight

When the Humphrey family started poultry farming in the 1930s there was nothing but free-range birds pecking around in fields during the summer, then huddling together in sheds during the cold winter.

Come the 1950s, Humphrey Feeds was one of the first to move into cages. But fast forward 80 years and things have come full circle. From 2012, the business will produce only barn and free-range eggs, while supplying feed exclusively to the free-range sector.

Martin Humphrey is the unassuming sales director of the feed operation, having worked his way up from sweeping the floor of chicken sheds to managing the feed mill. He told Poultry World’s Scott Casey about the feed business and where he sees the industry, and Humphrey Feeds, moving in the future.

HISTORY

My grandfather retired from the RAF in 1932 with a payout for an injury. He invested some of this money in becoming an apprentice poultry keeper and used the rest to buy a farm at Twyford in Hampshire. Everything was free-range at that time and birds used to lay just in the summer. They weren’t very prolific. If you wanted eggs in the winter they were pickled eggs.

My grandfather then heard that, in the USA, people kept their birds inside because that created a constant summer for them. So he moved his birds inside.

Initially, he produced his own feed for the farm, with some concentrate bought from outside. This expanded to selling to friends in the 1960s, and continued to expand until, finally, in the late 1980s we began to commercially market feed.

I joined the business in 1987. I changed from one day being an accountant in a suit to being given a shovel and told to sweep up a pile of muck. It was quite a change, but everyone needs a good grounding. Then I worked my way up, running the mill for 12 years, before taking on the sales director role.

When I started we were almost exclusively cage, with free-range eggs a small percentage of the industry. Now free-range egg production is more than 50% of UK industry. In 1985, we put up our first free-range operation and we’ve been involved in the sector ever since.

Our focus in feed has also changed. Originally, sales were almost exclusively to cage producers, but now we don’t sell to them at all. Free-range is our focus.

We are a mature business and are not reinvesting in colony cages, but converting the sheds to other uses. For example, at head office in Twyford we have an ice-cream maker, a croissant manufacturer and a wine agent working out of converted cage houses.

THE ORGANIC SECTOR

I would say it’s slipping. It’s been credit crunched and as much as everyone would love to see it take off again, we can’t buck the market. If people don’t have the money to spend on the product, we can’t force them to buy it. It’s a shame because I love organic. It’s a different way of doing things.

Will organic grow again? Yes. But will it overtake free-range? No. People want choice and some consumers will always want to buy the cheapest, and that will be met by the colony units. I’m sure there will always be a place for organic, to the point where we have spent money on generic rebranding. It needs a lift at the moment.

If it’s not handled carefully it will be another complexity, another hurdle for organic producers to cross. It might make some producers quit. If the market was stable then we would look at it carefully. We have some sites we could convert, but it’s difficult.

THE FEED MARKET

Prices. Wheat is the main ingredient in the poultry diet and prices have gone up £40/t in the past six weeks. That’s equivalent to an 8p increase in the cost of producing one dozen eggs. It’s an eternal challenge, but this season we are facing poorer yields across the UK and Europe, and an increase in biofuel production in the UK, which is making the market tight.

A few years ago we had good prices for soya, about £150/t, but now it’s twice that. I hope it can come down, but it’s supply and demand. With soya, the increasing growth and affluence of Asia, especially China, means more meat has been added to diets, which puts more pressure on the protein sources for rearing livestock.

Effectively, the price has been bid up. Also, pension funds and other investors have found commodities are a great financial product to play with, so over the past few years this has increased volatility. The old days, when harvest prices were lowest and then increased over the year, are gone.

GM and non-GM will be a challenge to us until the issue is resolved. By that I mean when the supermarkets no longer require non-GM – either because prices have risen too much, or the non-GM we are getting isn’t as pure as it should be.

There needs to be a broader discussion as to what the benefits of GM are because many people don’t understand or don’t like the idea. I’m not advocating GM, but it’s something we need to address.

When the policy for non-GM was rolled out, it was just applied to poultry meat and eggs. The supermarkets backed away from pigs and ruminants, so it has been a narrow focus for one type of livestock. But we’re still using oils in poultry feed that are derived from GM soya. We also have vitamins and amino acids that have GM steps in their production.

I wouldn’t say the doors are open to GM, but it’s not accurate to say we are non-GM. I can’t see that the GM ban is sustainable.

I think it is likely to be reintroduced under EU law, but its use will be reliant on what retailers think. They will have to be satisfied that it is good and wholesome to use, which it is.

More effort has to be taken to segregate feed according to species, so we don’t get cross-contamination, which was part of the problem with BSE.

A lot of people are keen to see meat and bone meal back in the diet because it provides a similar level of protein and oil to soya. Also it’s a good source of calcium and phosphorus, and it’s a natural source. Instead of importing material like phosphates from Tunisia, we could be using a locally-produced product. So, if it was allowed to be used and the supply chain agreed, we would use it again.

THE EGG MARKET

One hates to talk about credit control, but it’s going to become a more important part of our business. Some of the new producers will fail, they won’t be able to make a profit considering the price drops that have happened.

We are being careful about giving credit to anyone, but with new customers we are taking more precautions. When producers go out of business, usually the biggest debt is the feed bill.