Average UK Broiler Margin Less Than £20 Per Thousand

UK - A new report on UK agribusiness highlights that average margins on UK broiler production are as little as £0.019 per bird.

20 October 2009

3 minute read

Europe

The UK's large livestock and dairy sector has been going through a tough time for the past couple of years, according to a report entitled United Kingdom Agribusiness Report Q4 2009 from Companies and Markets. Producers struggled with rapidly rising input costs through 2007 and 2008 as the cost of feed and fuel soared.

The poultry sector is another industry which has seen consolidation this decade. The average margins on broiler production are as little as £0.019 per bird according to the Department for Environment, Food and Rural Affairs (DEFRA). This makes it very difficult for smaller producers to compete. The introduction of the EU Broiler Welfare Directive in 2010 will likely accelerate the rate at which smaller operators leave the sector as the capital investment needed to meet the new regulations is too much to be economical.

The report explains that the directive, which sets out laws for the treatment of broiler chickens, has re-sparked debate over battery chicken production in the UK. Animal welfare charities such as the Royal Society for the Prevention of Cruelty to Animal (RSPCA) are calling for DEFRA to impose tougher regulations than the EU directive mandates. Specifically, the RSPCA wants to see a lower maximum density for stocking broilers than the 42 kilograms per square metre set down in the directive. Predictably, UK poultry operators are strongly against this, claiming it will negatively affect their cost competitiveness relative to producers in the rest of the EU and will lead to no gain in the welfare of chickens. At the time of writing, DEFRA was still considering whether to set the maximum stocking level at 42 kg per square metre or at the lower level of 39 kg per square metre. A decision is expected at some point during the current half-year. Whatever DEFRA decides, other points in the directive such as the control of temperature and ventilation will leave less modern farms needing to invest in upgrading their facilities.