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The Involvement of British Chicken in the Economic Crisis of the Country


Sep 10, 2023

On an intensive poultry farm in North Herefordshire, farmer Jo Hilditch walks through one of her 22 chicken sheds, checking the birds for signs of illness and injury. These 20,000 chickens will soon be transported to nearby facilities for processing and delivery to supermarkets. However, Hilditch, like many other farmers in the sector, says she is not being adequately compensated for her work.

The poultry industry operates on extremely thin profit margins, and producers argue that the price of chicken is too low to keep up with rising input costs. A medium chicken at Tesco is priced at £4.20, while a similar product at Lidl costs £3.79. Hilditch, who produces 5.5 million chickens a year, finds it astonishing that a chicken can be bought for the same price as a latte.

The challenges faced by Hilditch’s chicken farm reflect the pressures that many British companies are experiencing, not only in the food industry but across manufacturing as a whole. The poultry sector, which experienced significant growth in the postwar period, has been hit hard by a series of upheavals, including the COVID-19 pandemic, Brexit, and the war in Ukraine. These challenges highlight the fragility of the UK’s food systems and the broader economy, with issues such as inflation, labor shortages, and rising wages.

As a result of these challenges, chicken farms and processing plants have been forced to close or reduce operations. The production of broiler chickens dropped 11.4% in July compared to the previous year, while exports almost halved. Food producers in various sectors are urging retailers to increase the price of staple foods to ensure profitability and boost productivity.

The history of the poultry industry in the UK is characterized by a shift towards intensive farming and the standardization of products, driven by companies such as Buxted Chickens and Avara. These companies have increased productivity and reduced the price of chicken through supply chain consolidation, selective breeding, and inexpensive labor. Today, poultry supply chains are among the most integrated in the agricultural sector, with processors managing all aspects of the process from farming to transportation.

However, for farmers like Hilditch, the narrow profit margins are becoming unsustainable. Soaring agricultural input costs have resulted in her poultry business operating at a loss. Though she secured a small increase in payment over the summer, this only covers input costs, leaving nothing for investment, equipment maintenance, or sustainability projects. The financial pressures faced by farmers in the industry have led some to choose not to restock and use their farm buildings for other purposes.

The consequences of these financial pressures are being felt across the sector, with processing plants closing down and job losses. Avara, co-owned by Cargill, will soon close its site in Abergavenny, citing increasing costs. The British Poultry Council has stated that its members are being forced to reduce production due to the inability to afford growing birds without receiving adequate payment. Both Avara and 2 Sisters, a competitor, have reported significant losses.

Various factors contribute to these financial pressures, including the high cost of fuel, which is particularly burdensome for the energy-intensive poultry sector. Fluctuations in feed prices also affect producers, as they rely heavily on feed for their chickens. While feed costs are subsiding, the situation in Ukraine remains uncertain, impacting input costs.

In conclusion, the poultry sector in the UK is facing significant challenges that threaten its viability. Farmers and processors are struggling with tight profit margins, rising input costs, and financial losses. Finding a sustainable solution will require increased consumer awareness and potentially higher prices for poultry products to ensure fair compensation for farmers and the long-term viability of the industry.

By Editor

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