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Poultry Farming in a post-Brexit environment?
Poultry Farming in a post-Brexit environment?
Post date
April 2017
Having attended the recent WCLA (West Country Layers Association) Conference in Exeter there is clearly a current air of optimism in the Poultry sector with many of the key packers and processors looking to take on new egg producers. However, with the current retail price being driven down, and current cost of production around £0.89- £0.90/ dozen is this a long-term opportunity for producers looking to diversify post Brexit?
The industry is undergoing two key challenges currently- Avian Flu & the resultant impact on labelling of ‘free-range’ products & the outlaw of caged systems in 2025 both which are likely to result in pressure on provenance and added value for the sector.
Currently, 57% of UK production is free-range. It is therefore reasonable to assume that a large proportion of caged farmers will either have to find an alternative to add value under a non- caged system or potentially exit the industry. This for a period is likely to leave the market of free-range eggs depressed as retailers battle for market share of ‘Eggs’. Additionally, consumption of UK eggs has risen by 9% in the past year and 85% are produced in the UK. This could result in a real opportunity for UK producers long term.
Many existing well-equipped and efficient free-range producers are best placed to cope with a short-term downturn. Without serious investment from new or existing caged producers this could leave these businesses the opportunity to fill market demand, increase economies of scale & decrease the cost of production. This change in production & marketing is likely to mean more integration between retailers & producers as retailers ensure they can fulfil demand. However, with free-range becoming the norm this could leave a larger gap in the market for those producers who wish to add provenance to their produce. Producers who can distinguish their products through enhanced cartenoid pigmentation in the yolk colouring for example or identify & market from a particular breed or PDO status could look to take advantage of the gap in added value within the sector. The net result could be that the industry is again left with two tiers; Commercial eggs (Free-Range eggs) & for example ‘Roaming Eggs’- a brand which is based on a production system with even lower stocking rates with more emphasis on field based production. This will of course be subject to control of avian flu by DEFRA and an effective strategy to promote UK egg production to the public. The potential for this opportunity may also be enhanced by the reduction in other agricultural sectors and a resultant drop in land values and rents. So, long term there is likely to be opportunities to fulfil rising demand for eggs for new & existing producers but the change in production systems will have to be marketed effectively to make this successful.
