UK poultry sector not financially sustainable

16-05-2006 | |

The British chicken industry is not financially sustainable according to a report launched by the British National Farmers’ Union (NFU).

The NFU warned that the British chicken industry, worth £3 billion (€4.4b or US$5.6b) at retail and the strongest in Europe, will not survive in the current climate.

The NFU emphasised that a price increase is the only way to secure continued production of British farm-assured chicken for UK consumers. Poultry producers during the last few years have experienced continuous downward price pressure while input costs like energy and labour have increased.

According to NFU president Peter Kendall the British chicken industry has been a great success story. “It has grown year on year with consumer demand and produces an excellent product, promoted by the industry. However, as the product price is squeezed and input costs soar, the farmer is left with little over the cost of production. This means the industry cannot modernise and invest, and […] it may mean farmers going out of business with an obvious impact for long-term supply.”

Kendall reflects the main reason why the report ‘British Chicken – What Price?’ calls on the customers of the poultry supply chain to increase the price paid to that chain, to meet consumer demand for British chicken, while achieving a margin over production to invest in the industry’s future.

The industry has another regulatory cost looming on the horizon: The new Integrated Pollution Prevention and Control Regulations, which will add further cost to an already stretched industry.

The IPPC legislation aims to prevent and control emissions to air, land, and water, and to address energy efficiency, the consumption of raw materials, noise, and site restoration. All of this means investment for poultry producers, many of whom will not be able to cover the costs.

The introduction of these new regulations could mean the end for many producers. The NFU therefore is asking for a delayed implementation of the IPPC, or at least for the costs to be mitigated and any charges or fees waived.