UK poultry sector has bright outlook

The general 2010 outlook for the UK poultry sector is positive with lower feed costs and demand for low-cost meat and eggs.

Prices began to improve for poultry meat and eggs as sterling weakened in 2008 and, with fixed costs reducing, the 2009 year should have shown better margins, said Andersons' Mike Houghton.

Still, there are challenges for poultry producers, as it is a highly competitive industry with few large-scale buyers and prices to producers are constantly being adjusted as feed costs change.

Broiler producers face significant reinvestment in housing, with recent surveys suggesting the average age of a UK broiler house is between 24 and 27 years. Egg production requires a similar investment, and birds must not be kept in traditional cage systems after January 1, 2012 due to the new EU legislation.

It is estimated that 58% of the UK laying flock is still in old-style cages, meaning there has to be major investment in enriched cage or free-range systems in the next two years or the UK will have to import eggs, said Houghton.

However, prospects for the egg sector are generally positive. Egg sales in the UK have grown for the third year in a row and the UK laying flock is expected to increase to 31 million birds in early 2010 after a significant decline this year. Average packer-producer prices in 2009 were 54.4p/dozen, marginally higher than last year.