Chicken goes too cheap for Smithfield


FRESH chicken prices at Smithfield Market have shown an increasingly wayward trend in recent months.

Price reports from the market soared to an astonishing 72p per lb in May and have continued at that level to date. This has prompted a number of comments at a time when the UK broiler market is openly acknowledged to be on its knees.

In fact, price reports on fresh birds from Smithfield have become very spasmodic and, for example, a price was quoted in only one week last month.

The explanation is that the mainstream fresh trade at Smithfield has virtually dried up in the current climate and when prices are quoted it is from a small sample base serving more specialised markets.

Frozen sales now account for most of the poultry going through the market and these present a steadier, more reliable picture.

A spokesperson for the market confirmed that the fresh trade was very limited and that traders were now mainly concerned with supplying regular customers at good prices, often for premium birds to customers as exalted as Harrods.

This was in great part due to the refurbishment programme. With much higher standards and higher rents to go with them, the poultry traders were now more positioned as quality food suppliers, she explained.

In other words, Smithfield is much less interested in finding customers for cheap surplus birds in the currently cut-throat market.

That the market is as distressed as ever is not in question. In his latest market report, NFU costings expert John Parsons reported the market as being the worst “in living memory” and said little optimism was present.

However, just as Smithfield now relies on its regular customers, it is understood that the main retailers are also paying profitable prices to the industry.

For those relying largely on the market outside the supermarkets it is a different story.

A survey of prices into the wholesalers and markets from six of the leading packers at the end of June showed them to be consistently in the range 28-32p per lb.

One of the long-established smaller processors compared these wholesale levels to average costs of production, after processing, at around 48p per lb.
“Processors cant keep losing money week after week. After 18 months of it there is not going to be much of an industry left for the future,” he predicted.


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