Poultry price rise inevitable - UK - Rocketing feed costs are pushing up poultry production costs making a substantial price increase in poultry meat inevitable says the British Poultry Council.

Widespread drought in the UK and across cereal producing areas of the world has cut harvests, particularly of feed wheat, and cereal prices have leapt as a result. UK feed wheat, which makes up almost two thirds of poultry diets, has doubled in the last twelve months.

Forward contracts initially shielded producers from the increases but those contracts are now ending and the poultry industry is facing a 30% hike in feed bills right now with more increases looming over the coming months before the next harvest around July-August. Other feed ingredient prices have also increased on the back of increased world demand and supply shortages. Feed is the single biggest input in the production of poultry meat accounting for around 40% of an oven-ready bird.

“Overall we estimate that right now the poultry industry is facing a massive £190 million increase in its feed bill alone, says BPC Chief Executive, Peter Bradnock. “It is quite simply a cost too far. Companies have been absorbing a whole range of inflationary costs over the years, but this increase cannot be met through even greater efficiencies on the part of farmers or processors.

Nor is any intervention likely by the Government or the Commission to reverse the climb in cereals costs. Poultry producers have no option but to pass them on in higher poultry meat prices, necessitating an immediate increase of 15% to 20 %, around 6 pence per kilogram. “The increase is unavoidable and we are confident that our customers and consumers will recognise this and view it as fair and reasonable for quality British poultry meat” says Bradnock.

Source: British Poultry Council - 12th January 2004