THERE are strong opportunities for egg and poultry producers in the period ahead, but both sectors will have to meet real challenges if they are to benefit from continuing growth.

Leading industry figures drew attention to planning problems, imports, bird flu, global volatility, and extreme weather among the hazards that lay ahead, at Poultry Network Live this week.

See also: EP 57 | Poultry Network Live: confidence, caution and the people challenge

For hatchery man Patrick Hook, the biggest problem was planning, and the threat it posed to maintaining UK production.

“There are great growth opportunities for the poultry meat sector. If you look at it on 20 million birds a week, if our new demand is at an average of 3% a year, that’s 600,000 extra chickens a week that we need a year to be grown in this country”, he said.

“So it’s a fantastic opportunity for producers, whether you’re rearing, you’re breeding, you’re hatching, or you’re growing. There’s a huge opportunity for us as farmers to grow our businesses. The problem we have at the moment is that we have a planning framework that’s completely broken.”

Delays

One planning application had attracted 1,000 objections in the first 10 days. Another had been in planning for 20 months, when it should have been 12 weeks, said Mr Hook.

“The cost of planning is massive. It roughly costs us for a planning application for a new breeder farm between £100,000 and £150,000.”

The danger was that if UK production could not keep pace with demand, imports would consolidate their position in the market.

A lot of the recent building that had been taking place was only to play catch up from the loss of space from the move to 30kg stocking densities, he said.

“If we don’t meet the demands of the sector, whether it be breeders, hatching, or growing space, our default position is we’ll be importing our products. Our self-sufficiency rates in this country have reduced.

Imports

“Chinese chicken is now the fifth largest importer of poultry into this country and it’s come from nowhere. Where is that produced? They’ve always produced in cages. What’s the food safety standards of these birds? We don’t really know.”

“We will never get away from imports, imports have always been there, but we need to make sure we have the ability to offer the British product first.

“We need to get back to that point, so that those imports don’t get to a sustained position where we can’t recover. We don’t want to get to the point where people get used to not seeing British chicken on the shelf, because the planning framework and all the policies surrounding it are not fit for purpose.”

“I’m hoping with the national policy planning framework review that’s happened, that will create some clarity and consistency for the planning authorities to approve these applications.

“I’m hoping that going forward, if we can work together as a sector, whether it’s the egg sector, the meat sector, BPC, BEIC, BFREPA, the NFU, we need to work together to ensure that we lobby the government to ensure we have a planning framework that’s fit for the future. At the end of the day, it’s food producers, it’s food security, and it’s critical infrastructure, and we cannot have anarchist organisations disrupting critical infrastructure.”

Extra investment

Geraint May from HSBC agreed that planning was a major obstacle for new lending. The bank was a key lender to agriculture, with £5 billion currently on loan to the sector, and poultry was leading the way.

“But the biggest blocker is planning,” said Mr May. “Speaking to a business a few weeks ago, there were 12 farms that they had where planning applications had been in the pipeline for up to five years.”

“Things that they’re really trying to target here are stocking rates; efficiency, which is a huge thing; biosecurity for Avian Influenza; water storage; biomass and biogas. As we’re seeing these volatile energy prices, producers are looking at different ways of how can they make their businesses a lot more streamlined, and either reduce those costs or fix those costs.”

In addition, a lot of farmers were now starting to realise that not having all their eggs in one basket was a good idea: “We’re seeing a lot more interest with dairy farmers, the milk price being on the floor, and coming to us wanting to have some investment for units.”

Risk of egg oversupply

For Ken Clow, Noble’s managing director of shell egg business, the challenge was to keep the market in balance, while moving forward in a volatile global outlook.

“The only certainty is that we’re heading into more uncertainty,” said Mr Clow.

“As we look forward to how many birds are in production planning over the next 18 months, we just need to be cautious that we don’t get to a period of oversupply. In my five months in the egg industry I’ve seen prices of nearly £3 a dozen, and I’ve seen prices kind of under £1 a dozen, so it is volatile, and that supply and demand we do need to be cautious about.”

He also cautioned that UK flock size was not a completely reliable indicator for likely egg production. The growth in sales of white eggs meant that there were increasing numbers of layers with higher egg output. At the same time there was a trend for flocks to be kept in lay for longer.

For now, demand was outstripping supply.

“We’ve just come off the back of one of the worst AI seasons in the laying sector. That’s taken a lot of birds, a lot of volume out of the market. That risk will not go away, whether it is avian influenza, Newcastle disease, or other things on the horizon, that risk is there in the supply chain.”

Five years ago, there were no major conflicts affecting costs of production. “Five years later, here we are with two global conflicts continuing to affect oil prices, wheat prices, and availability of materials such as packaging.”

“What that will look like in the future, no one in this room is going to know, no one in this room is in control, we have to react to it.”

The good news was that the egg industry was growing.

“It’s in growth of 3% year on year, which is a properly brilliant place to be. When you compare that with the rest of food in grocery, the reality is volume is declining, so eggs are in a really strong position. When you think of the scale of the egg market, it’s worth about £2.2 billion, so it’s bigger than butter, bigger than coffee, bigger than fresh fish.”

There was one “slight wrinkle”, in that volume had slowed over the summer, said Mr Clow.

“A long hot summer has not been brilliant for home baking, or for hot breakfasts, and there has been a bit of slowdown in the market over the summer period.”

This was not expected to last: “Consumers’ diets are shifting. We are in a world where GLP-1s (weight loss medications) are now at almost 10% of households, where customers are looking for high protein in small, short bursts. We are the cheapest form of protein on the shelf, we are properly affordable, and in a cost-of-living crisis, it’s no surprise that discounters make up a quarter of all free-range eggs sold in the UK.”