April 10, 2008

UK poultry producers seek price hikes on rising costs
 

Egg and broiler producers in the UK are calling for more price increases as the steadily rising production costs weigh heavily on the industry.

Free-range egg and broiler producers have seen a 19.6 percent increase in production costs from June 2007 to February 2008, while the costs for standard egg producers shot up by 27 percent, according to statistics released by the National Farmers' Union.

The rising production costs are caused by increases in feed price, energy and water charges.

"If producers at least receive an increase to cover the extra feed costs, other costs have also gone up and this has resulted in a growing number of farmers shutting their doors. For example, one integrated company has recently shut the doors on two of its sites holding 200,000-300,000 birds," said Charles Bourns, NFU poultry board chairman.

Integrated and non-integrated poultry units also pay differently; integrated units pay between GBP 220 to GBP 230 per tonne of feed while non-integrated units pay between GBP 250 to GBP 270 per tonne feed.

Bourns said he is able to understand the difference, and that the UK poultry industry could become as battered as the pig industry if there are no price increases.

Added to the production costs are expenses for the compliance with new regulations. Many poultry farmers will not see good returns and suppliers are struggling to meet ends, said Bourns.

The British Free Range Egg Producers' Association (BFREPA) is also calling for price increase for eggs, as its last hike a year ago had mostly been eaten away by production costs.

However, BFREPA chairman Tom Vesey is worried that their requested price hike of 5 pence per dozen eggs would not be enough as feed costs could continue to climb.