Poultry sector hit hard by winter costs

Poultry and egg producers’ costs soared last month amidst the coldest winter in a decade, and many are urging retailers to ease downward pressure on prices to help the industry recover.

As temperatures plummeted to as low as -18C, broiler producers struggled to keep houses warm, even with the heaters running non-stop. Higher welfare units suffered the worst, as lower stocking rates meant indoor temperatures fell even further.

Charles Bourns, who keeps 40,000 Freedom Food chickens in Gloucestershire, said the extra gas added 10p a bird to his cost of production. “Our winter gas bills are normally about £5000 a crop – this crop will have cost £9000.”

On average, he reckoned the cold weather had added 5p a bird to most producers’ costs of production, depending on their stocking rates and age of housing. That equated to £6m across the industry, and wiped out most of the profits made last summer.

“People were wondering whether to restock because they would be losing money, and many were getting to the stage of calling for a cold weather payment. You expect the winter to be slightly more expensive, but not this much more.”

With feed costs likely to fall this summer, Mr Bourns, who is chairman of the NFU Poultry Board, urged retailers not to force chicken prices down in response. “There is no doubt that the cold weather has cost the industry a lot of money – and we need to catch up what we’ve lost. We need to leave that money on the farm instead of taking it off the retail shelves.”

James Hook, managing director of PD Hook Hatcheries, agreed that the unforeseen extra costs of production should be passed onto the consumer.

“The retailers just keep downward pressure on prices with no regard to what goes on on farms. There are a lot of people who’ve suffered and will be really struggling to pay those bills. For a consumer, 10p a bird might not sound a lot, but for the producer it is a lot, when you are only getting margins of 1-2p a bird.”

Egg producers had also suffered, with increased feed consumption and reduced production, said Jeff Vergerson, who keeps 15,000 organic layers near Norwich, Norfolk. Although few producers heated their sheds, increased labour was a real consideration.

“We had a lot of water freezing in the sheds, so we had to do all the water by hand. The birds don’t like being without water and it took them a day or two to adjust, so there was an immediate drop in production.

“The hens also didn’t want to range so we needed more litter in the sheds – our wages were about 20% up during the coldest period.” With the hens consuming 2-3% more feed to keep warm, on top of a 5% drop in egg production over the month, the business had certainly been affected, he added.

“But we’ve been quite lucky – one Scottish producer had a roof collapse under the snow. The egg lorry struggled with every-other-day collection, but with a fair bit of shovelling and salting there was only one day that he didn’t make it at all. We’ve also got quite a bit of food storage capacity so feed deliveries could be timed to make the best of the weather.”

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