February 11, 2004

UK Poultry Prices May Increase Over Rising Feed Costs

Prices of poultry products may soon be rising in the United Kingdom, as retailers and processors call for higher prices to cover rising feed costs.

The Grampian Country Food Group - the UK's biggest processor - has said it is close to securing an increase of about 8p/kg from its customers and this will be passed back to growers.

A spokesman for Sun Valley Foods also confirmed that they were pressing for a price rise, though with more caterers than retailers in their customer base, this was proving more difficult.

The developments followed an NFU warning that poultry production was in danger of becoming a niche activity in the UK unless retailers and caterers paid more.

NFU poultry chairman Charles Bourns said placings from hatcheries were already down by 1m chicks a week, a drop of about 7% from normal chick throughput of 15m a week.

Growers were receiving just 49.5p/kg, while the cost of production had risen to 51.5p/kg and was set to put on another 5p/kg by March.

A typical 150,000 bird unit would be spending £80,000 more on feed this year, equivalent to an extra 8p/kg, he said.

NFU president Ben Gill added that it was not just feed costs that were rising.

The sector faced an extra £18m a year charge for waste disposal and £6m more for wages. Water and electricity costs were also due to rise.