fbpx

The cost and returns of slower-growing broilers

Hubbard JA757 perching at four weeks old

FARMERS who switch from rearing conventional broilers to slower-growing or organic report broadly similar returns, a new analysis of the Dutch poultry sector has revealed.

But in 2017, the year the research was undertaken, those producing one tier of slower-grown breeds did achieve annual incomes just over 10% higher, it suggests.

The Netherlands has one of the most established markets in the world for poultrymeat produced by birds stocked at lower densities or with slower genetics, making it a good case study for countries like the UK that are, in some cases, moving away from conventional production.

European Chicken Commitment

The Dutch study looked at both the production costs and farmer returns for four tiers of production; conventional broilers reared in line with EU regulations, the Dutch Retail Broiler (DRB), the Better Life One Star (BLS) and Organic birds.

The DRB are slower-growing breeds stocked up to 38kg/sq m, and BLS birds are stocked at a maximum of 25kg/sq m with access to a winter garden.

A number of UK outlets have said they will switch to the European Chicken Commitment ECC, which sits between the DRB and BLS tiers.

Tesco has an extensive trial of ECC chicken sold under the Room to Roam brand, with most of the UK’s major integrators set to introduce or introducing lines of slow-grown birds.

Others, like KFC, have said they will switch to the ECC standard by 2025.

Production costs at the farmgate, after slaughter and after deboning

ConventionalDRBBLSOrganic
Total costs at farm level (eurocents/kg live weight)82.699.5119.2242
% Increase20%44%193%
Net cost of carcase (eurocents/kg carcase weight)146172200403
% Increase17%37%176%
Net cost of deboned meat (eurocents per kg breast fillet)3414726071,712
% Increase38%78%402%
Source: Wageningen Economic Research

In the Dutch study, the total cost of production rose from conventional, which was the lowest through the tiers to organic.

Feed costs were found to be the largest difference in price, with fixed costs following (such as the expense incurred in installing outdoor spaces) then other variable costs.

Input prices and variable costs

ConventionalDRBBLSOrganic
Day old chick (eurocents/bird)31353645
Feed Price (eurocents/kg313029.665.0
Animal health (eurocents/bird)54.545
Heating (eurocents/bird)3.855.227.119.88
Catching (eurocents/bird)44.34.75
Electricity(eurocents/bird)2.212.883.532.36
Litter (eurocents/bird)11.352.082.33
Enrichment grain (eurocents/bird)001.510
Enrichment straw bales (eurocents/bird)00.50.50
Source: Wageningen Economic Research (2017 figures)

Heating and electricity costs rose for the more extensive tiers of broiler production, the BLS birds being up 80% and 60% respectively when compared with conventional birds.

But along with higher input costs came higher returns, and the research found that they were broadly in line with cost of production increases.

Revenue

The revenue for farmers in euros per kg of liveweight was 0.83 for conventional, 1.01 for DRB, 1.18 for BLS chicken and 2.42 for organic birds.

That translated to annual farm incomes of €67,000 for conventional producers, €75,000 for DRB farmers, €71,000 for BLS and €60,000 for organic.

Those figures are based on a farmer owning and operating a single poultry farm based on a size representative of each production tier.

The full report can be found on the Wageningen site