From feed costs to egg prices, any conversation with Martin Humphrey is likely to be as wide-ranging as it is interesting. Jake Davies puts the questions.
What’s the immediate outlook for feed?
Feed is very cheap at the moment. Wheat is at a five-year low, soya beans at a six-year low.
We’ve had a number of customers who have bought forward, some have bought into the next harvest, because they think it’s cheap. How long are we going to stay there? Well, look at all the arable farmers who are selling for £30/t less than the cost of production.
If an arable farmer is not making money on his wheat, why would he sell? So I can see a lot being held back in stores until prices improve. That said, it’s been a good harvest, and there’s quite a lot in store already. What’s left will have to be sold, and sold cheaply at some point in the season.
How about in the medium term?
There are some indicators that prices may lift. The CAP reform has already had an impact on planting for next harvest, because of the three-crop rotation rules. If you look at the November wheat price for 2016 compared with 2015, there’s a £12/t jump – that’s already saying we think the price is going to rise, but it’s still short of making good the £30/t loss UK farmers are facing on their wheat.
So prices for this year are very good – for the poultry farmer. I just hope that the supply chain doesn’t nick it all. The potential is there for farmers to have a margin to repair old machinery and reinvest in new equipment.
Your business is heavily involved in the organic poultry sector – what are its prospects?
Things are looking good. Demand across Europe is picking up, it’s picking up massively in America, and a little bit slow in this country – but it is coming up.
We’ve had one producer who has expanded in the broiler side, some egg producers are expanding and some coming back in to the sector – so hopefully some green shoots. What’s more, if you talk to the packers, they are generally all looking for more organic egg. There is demand in that market. It’s just a question of giving farmers the confidence to invest.
However, now that the majority of producers are using GM feed, it has become more difficult to convert. Ten years ago, when everyone was feeding non-GM, you could switch easily and without cost. Today, birds must be fed non-GM for a year before they can change production. What packer is going to pay someone to use much more expensive non-GM feed for a year without achieving a corresponding premium for that egg?
There are big changes to EU legislation surrounding organics in the pipeline – what’s the latest?
The new proposals, which are subject to a derogation until 2017, are currently very ambiguous. The British Egg Industry Council is taking a lead on this, trying to establish the standard, but there’s much indecision at EU level.
For example – the proposals stated that, to qualify as organic, a bird must spend a third of its life outside. But how do you interpret that? Does it include rear? All producers are currently achieving this in terms of access to the range during the normal laying period.
Another concern is the concept of requiring feed to be locally sourced – previously “local” has been interpreted in the widest possible sense, so the whole of Europe.
There are rumours the EU wants to tighten up what this means – in this case, the British Isles. That’s potentially very serious. We are hugely reliant on organic feed imported from outside the EU. In the UK, a clean crop with acceptable levels of mycotoxins is almost impossible to grow without fungicides.
How do you think organic farming regulations should evolve?
We’ve always got a challenge between what’s the ideal and what’s practical. I think the EU is leaning from pragmatism towards idealism, and we need to be wary of going too far along that route.
What the EU also wants is more people to be eating organic produce. So, actually, if we make it more difficult for farmers to grow organic crops or rear organic livestock, it will make produce more expensive.
There’s this dichotomy between what’s desired and what’s achievable – and that needs to be resolved. It’s not going to be easy. Different people have different principles. I’m probably closer to the pragmatic end. But we have to stick to the principles of organic farming.
Bird flu is clearly a threat to every business in the poultry sector – how has yours planned for an outbreak?
We had a big discussion about this when we heard about the outbreak (in February, on a breeder farm in Upham, about 10 miles away). The initial response was that, in the event of a positive on our laying farms, we would just shut up shop. But we can’t – we’ve also got pullet rearing and a feed business, and farmers need to be assured of a steady supply.
Geographically, you were very close to the breeder farm hit by low path AI. Has it caused you to reconsider the way we deal with an outbreak nationally?
Yes. If you think about the way that was handled, it took more than a few days to be confirmed. All that time we could have been moving wheat, delivering feed and driving through that area. We need to develop a quick response system that’s not currently catered for – whereby we say if there’s a suspected case, it is given a wide berth.
It would be sensible if, just on a precautionary basis, all the reps, feed lorries and catching gangs just avoided the area for a little while. There’s a lot to be said for some common sense.
What are your thoughts on the proposals for a pan-industry levy to speed up any clean ups following an outbreak?
We need to take a responsible attitude, and ensure that when we get it – it’s not a case of “if” – we can clean up the country and export poultry. I pity all the genetics companies that have restrictions because of the time it takes to clean up another business. There is a collective interest in getting problems sorted as soon as possible.
How does the overall free-range egg market look?
I’ve been concerned for a year now that there’s been a problem of too many laying birds, but it hasn’t happened yet. The BEIC has had a good role to play in this, demand has increased for eggs.
But there’s oversupply coming. The usual sequence of events in a weakening market is that packers are reluctant to implement lower prices in the run-up to Christmas, because they don’t want to upset their customers. So if by October there hasn’t been a price drop, packers will probably be reluctant to drop the egg price to producers. But all that does is store up the grief until after Christmas when the market is traditionally weaker.
Top performance tips for free-range egg farmers
Egg producers may be used to charting total egg numbers against breed standard, walking the birds every day and recording mortality.
But there’s a whole lot more data they can access to monitor the performance of their flocks, and so pick up potential health problems or quality issues faster.
Poultry World asked Martin Humphrey for the key measurements farmers should be taking every day.
Absolutely critical – a drop in water is the first indicator of what’s going to happen to egg size. It is also a great indicator of health challenges that may present in the coming days.
If possible, find a way of monitoring feed intake as well. Don’t just write the number down on the wall, calculate it and, even better, plot it on a graph. Look out for trends, compare with other data and it will help build a picture of the flock’s performance.
Remember to count all the eggs, and not just first class. Keep an eye on seconds every day – something is not right if there is a sharp jump.
Minimums and maximums should be monitored. You will be able to plot water intake against temperature, feed intake and find there is a close relationship to egg quality.
About Humphrey Feeds
Humphrey Feeds is a modern, diverse farming business. Founded by Martin’s grandfather in the 1930s, he was one of the first to house laying hens in cages.
When Martin came into the business, free range was only just beginning to develop as a small niche for welfare-conscious consumers. The company has evolved, adding a feed and pullet-rearing businesses to its activities, whilst old cage units have been converted, now housing local enterprises. As a sign of the diversity, one leg of the business – Hazeley Developments – is focused on building domestic properties in the south, with a particular focus on Winchester.
Martin says the family aims to grow the company’s pullet rearing operation, and envisages moving its feed mill in the coming years. While Winchester used to be close to the centre of free range in the UK, the sector is gradually migrating north, he says, and Humphrey’s needs to move to a new centre of business gravity.