Poultry Farm Incomes Fall as Farmers Battle Lower Prices

UK - Poultry farm income fell 16 per cent to average £107,000 per business in 2016, according to latest statistics from the Farm Business Survey. Falling broiler and free range egg prices hit bottom lines across the sector and forced businesses to take an even closer look at productivity.
calendar icon 3 May 2017
clock icon 4 minute read

Income for free range laying farms fell by 10 per cent to average £34,000 per business last year, and broilers saw a similar hit to incomes, falling back 9 per cent to average £348,000 per farm. Yet the value of poultry products leaving farms hit £3.2 billion as farmers continued to increase output and efficiency.

Nationally, the free range laying sector saw egg prices fall by 11p to just 88p per dozen during the last financial year, according to Defra. Yet Rachel Lawrence from the Farm Business Survey explains that there is a huge variety in prices received: “producers seem to use a range of different marketing channels and we see variability in prices of up to 20 per cent between producers. It’s also important to remember that national egg consumption actually increased by 2 per cent last year, just as farm gate prices were falling.”

Broiler units were also hit by falling prices, with average broiler prices dropping by 23p per bird during the year. But farms responded by boosting productivity, output increased from an average of 7.2 to 7.4 crops of birds per year.

Across the sample huge savings were made as the feed bill per bird fell by 15 per cent and producers cut running costs by 7 per cent. In particular, farms cut back on the labour bill, with lower spending on both permanent and casual staff resulting in a 19 per cent reduction in total labour costs.

“This closer attention to spending, combined with higher throughput, has helped businesses to counter the worst of the falling prices. Lower input prices can also help to drive profitability, with our broiler producers being boosted by a fall in chick prices, which fell 8 per cent over the course of the year,” explains Ms Lawrence.

“Volatility is nothing new to poultry producers, and something that farmers are becoming increasingly adept at handling. Over the last 10 years poultry farms have seen incomes fluctuate by up to 70 per cent. Yet the national poultry flock is at its highest level in almost 10 years and consumer demand continues to increase; poultry now accounts for 42 per cent of UK meat consumption and is a vital part of the UK agriculture sector; totalling 13 per cent of gross agriculture output.”

“In this time period we’ve also seen farmers look to diversify their income streams. In 2016, 28 per cent of poultry farm business income was from diversification, up from just 11 per cent five years ago. Looking to the future the signs of a strong poultry sector are already there, the trend of diversification continues to bolster farm businesses,” continues Ms Lawrence.

Poultry businesses also continue to be some of the most profitable in the farming sector says Ms Lawrence. “The average poultry farm income in 2015/16 was £75,000 higher than the national farm average. And the proportion of loss making businesses is also a lot lower- just 8 per cent of poultry farms lost money in 2016 compared to 22 per cent of all farms nationally. The sector also represents some of the highest earning farms in the country; last year only 9 per cent of farms nationally earned more than £100,000 compared to 28 per cent of poultry farms.”

The Farm Business Survey is always looking for new participants to help make national poultry statistics as representative of the sector as possible, and encourage you to take part if contacted by your local FBS centre. Poultry Production in England 2015/16 is available to download for free from the Rural Business Research website.

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