Chicken supply facing ‘crisis’ due to low returns, producer claims

Poultry farming in the UK is at a “crisis point” and risks “following the same path as the egg sector” if producers don’t see yields picking up quickly, a leading grower has warned.

Only the “top quartile” of chicken farmers in the sector are currently making enough money to continue producing in current financial conditions over the long term, said Jo Hilditch, managing director of Herefordshire-based Whittern Farms.

Many growers were “not topping up” their birds in the face of chronically low yields and rising costs, Hilditch said. She told The Grocer she was forced “to put money back into the business from my private reserves.”

Her company produces around six million birds a year from three different farms and supplies conventional indoor broilers to Tesco through processor Avara Foods.

Hilditch and her family have a long history in poultry farming, with her father being one of the original founders of former chicken giant Sun Valley – a company eventually acquired by Cargill, who then founded Avara in a joint venture with Faccenda Food in 2017.

But with rising input inflation and challenges like bird flu, she said her company’s costs, and those of many other producers across the sector, “were not being paid for by our income.” This was exacerbated by the fact that last month the government left the poultry sector out of its watered-down funding program for energy- and trade-intensive industries.

Whittern Farms currently sells a 2/2.5kg roast chicken to its processor for £1.18/kg, with consumers asking around £2.27/kg for the average whole bird, Hilditch said. But once the usual processing and retail costs were deducted, the company was looking back at just 21p/kg, showing there’s “little or no margin if you’re an average grower,” she added, making it increasingly unprofitable to produce chickens.

Kantar data [52 w/e 27 November] shows that average prices for fresh whole chickens rose 11.2% over the past year, with some chicken cuts rising even more.

But Hilditch – which is urging supermarkets to raise prices even more and pass on higher yields up the supply chain – said their production costs have risen by about 30% over the past year, with even more to come than the government’s current energy support package is to the end, so “someone gets squeezed”.

She was certain that “we’re going to make a loss this year,” a position many other producers found themselves in. And many — especially those who don’t have funding to pay off — might decide they “would rather not have birds in their coops that cost them money.” , you suggested.

“The bank manager is coming with a crisis team to discuss how we are going to handle this situation,” she added, along with others in the industry in similar positions.

“When I go to the supermarket I find it very frustrating that you can buy two chickens for £8 when I know how much it costs to produce them,” she said.

“The chicken farming sector is very advanced and we have never been supported by subsidies. We don’t expect that either, but we need a fair price, otherwise the writing is on the wall and there’s no chicken if [the supermarkets] don’t be careful.”

Her comments come a week after major processor 2 Sisters Food Group – which has reiterated her calls for higher yields from supermarkets for the past year and a half – announced it will close its factory in Llangefni on Anglesey, citing rising costs . More than 700 jobs are at risk.