May 6, 2009

                              

 

Consumers in the UK could face a shortage of chicken unless producers receive 1-2p/kg extra for their birds, allowing them to reinvest in their rearing facilities.

 

According to the National Farming Union, there is big risk of producers exiting the sector if they didn't have more chickens to breed.

 

Though importation is feasible, the NFU says it will take place in 10 to 15 years in time with the predicted increase in global population set to fuel overseas demand.

 

The union also mentioned that securing supplies could be more difficult at a time when the UK market was more dependent on imports because of a failure to pass on margin, so allowing investment.

 

This is backed up by a recent Savills report, commissioned by the NFU and UK broiler growers, which showed periods of sustained loss from 2004 to 2008 led to little investment in the broiler sector, particularly for new chicken housing. "Input costs have risen dramatically over the last five years, while margins have not increased to the same degree."

 

Norfolk producer Nigel Joice explained how he had invested GBP5 million on his poultry unit and will not heavily invest again with the current margins.

 

He said that he currently receives GBP1.20 a chicken "and it costs very nearly this amount to rear a bird, leaving behind a very small margin."

 

He also supported the 1-2p/kg needed to allow re-investment for producers.

 

His other key concern was the expected increase in production costs because of new legislation, such as DEFRA's Responsibility and Cost Sharing proposals. "The proposed 4p/bird place levy would wipe out any margin and would put me into a loss making situation overnight."