05 March 2015 | Online since 2003

20 November 2012|Feed and Forage,Finance,News,Poultry

Higher feed prices 'here to stay' says poultry chairman

The chairman of the British Poultry Council (BPC), John Reed, has warned that higher feed prices are here to stay.

His warning came during a speech at the Egg and Poultry Industry Conference (EPIC) last month, when he said, "Volatility in feed commodity prices is likely to continue, but from a higher base line."

He said, "Feed prices are not going to return to the kind of levels most of us here were used to when we were growing this industry over the last 20 or 30 years. Our challenge is to handle the volatility better. This means using more sophisticated risk management tools and requires the co-operation of the whole supply chain, including retailers."

The message to retailers was reinforced by Mark Williams, chief executive of the British Egg Industry Council (BEIC) during his speech at EPIC.

He said, "There are producers in this room and out there in our industry who are suffering very badly at the moment. All I would implore, because I guess that this will be reported wider than me talking to you today, is that the market needs to react, it really does, or we are going to find ourselves with big potential problems with supply."

John Reed said that climactic conditions this year had caused crops to fail in varying degrees around the world. This would happen again in the future, possibly more frequently, more dramatically, and climate change and water shortages would continue to hit crop yields.

The new Agriculture Minister, David Heath, said that whilst the European Commission believed that a good South American harvest was likely to improve the price and availability of feed stocks going into 2013, climate change and the risk of more unseasonal episodes of weather meant that the country would need to "develop a plan B" for times when supplies were short.

"This is why, as a Government, we spend millions of pounds each year on research projects which can help with resource efficiency," said the Minister.

"The 369 million chickens slaughtered in Britain in 1973 needed just over one and a half million tonnes to feed them. Today, the same amount of feed will support 527 million birds - a 42 per cent increase. These improvements came from boosting fertility and improving disease resistance, from developing new skills and applying the latest scientific knowledge. These are things that have helped to reduce costs, reduce demands on resources and improve competitiveness."

The Minister said it was vital that UK consumers were able to access and afford a balanced, healthy diet. He knew that British agriculture was under considerable pressure at the moment. Food prices were a major issue for many families, but British farmers were also seeing their costs rise.

"I know that you have pressures of your own whilst trying to keep prices affordable for consumers. I know that feed costs are a great concern for you all. Forecasts are that they will remain volatile and put pressure on your margins."

But John Reed said it was not only poor climate that was forcing up the cost of feed. He said that the use of food crops for biofuel was also having an impact on the availability and price of feed ingredients.

"We live in quite a different world now. Our industry is competing with subsidised bio ethanol and bio diesel, which is driven by government policies in north and south America and here in Europe. Biofuel now takes 40 per cent of the US corn crop and an even greater share of EU rape oil. It's projected it will take about three million tonnes of UK wheat. That's almost the same amount of wheat as the UK poultry industry consumes.

"All this underpins and pushes up commodity prices, challenges our businesses and makes the days of cheap food just a memory," said John Reed, who said that, with world population increasing and more people demanding a protein diet, he believed it was unsustainable to create a biofuel industry based on food and feed crops.

He said he was pleased to see that the EU was now reviewing its biofuel support policy. The US poultry industry and the International Poultry Council were pressing other governments to do the same.

Peter Charlton, vice chairman of Europe for Alltech, said the use of grains in the ethanol industry had been around for decades in the United States, but one of the last pieces of legislation put in place by president George Bush committed the country to producing 20 per cent of fuel from renewable sources.

"Renewable sources in America is ethanol from grain," he said. "If they are going to hit 20 per cent by 2020, and a lot of people in this room will say that is madness, that cannot happen, that will use 300 to 350 million tonnes of grain. That's the US grain harvest, full stop. Yes, it's madness and it's great to see the Europeans bringing more flexibility to biofuels, but it is there today."

John Reed said that the EU's policy towards GM feed was also a problem for the poultry sector.

He said that Brazil and Argentina had previously synchronised their licensing of GM varieties of soya, corn and wheat with that of the EU. "Now they don't bother.

They are starting to grow GM varieties not yet licensed in the EU. China imports roughly the equivalent of Argentina's entire soya crop each year. Why would they worry about the EU's fears and hang-ups with GM."

Peter Charlton said the feed industry in China today amounted to some 100 million tonnes.

The figure had doubled over the last 10 years.

"It's been estimated that if the Chinese people, on average, were to eat the same per capita meat protein consumption that the Americans do, then you would need a feed industry in China somewhere in the region of 600 or 700 million tonnes," he said. "When their feed industry talks about adding growth, they are not talking about adding 10 per cent or 20 per cent, they are talking about doubling the number of feed mills they are putting in place."

The poultry sector is unique in the United Kingdom in that many leading retailers still insist on the use of only non-GM feed.

The poultry industry has been pressing for this restriction to be lifted, to bring poultry into line with rules for other livestock sectors.

Duncan Sinclair, agricultural manager of Waitrose, told EPIC delegates that his company was aware of the potential problem ahead in sourcing non-GM feed.

He said any decision to abandon the requirement for the poultry industry to use only non-GM feed would be taken by the Waitrose board, but he felt it was an issue that was likely to come to a head in the next year.



No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.


3 March 2015
Field Service Engineer (Electrical)
They are part of a large group and service the whole of the UK in a various sectors, including but not limited to, Industrial...

20 February 2015
Developer- Front End
Understanding and experience of scalable software development concepts including n-tier software architecture, web farms / ga...

28 February 2015
LGV (C+E) Tanker Drivers x 4 - Temp to Perm - Kingsbury
Duties to include collection of milk from rural farms and delivery back to base location. Silver Arrow, a part of Brit Europe...

4 March 2015
Senior Offshore Substation Installation Manager
Become a key member of project teams working on the construction of offshore wind farms. We are currently working on behalf o...

17 February 2015
Work Placement Officer
Barnsley College is an exciting place to be. In recent times, we’ve enjoyed considerable success and our reputation for quali...

Top stories you may have missed
2 February 2015 | Arable
Is EU membership damaging UK farming?

Is EU membership damaging UK farming?

Membership of the EU is damaging the British farming industry, according to...

29 January 2015 | Machinery and Equipment
Drones 'rapidly changing' agriculture

Drones 'rapidly changing' agriculture

BASIS has launched an accreditation for pilots of Unmanned Aerial Systems (...

23 January 2015 | Arable
UK wheat yields have potential to double

UK wheat yields have potential to double

UK wheat yields have theoretical potential to more than double over the nex...

23 January 2015 | Machinery and Equipment
Crowds flock to LAMMA 2015

Crowds flock to LAMMA 2015

Britain’s farmers flocked to Peterborough for the first day of LAMMA’15 to ...

22 January 2015 | Cattle
Don't blame supermarkets for milk crisis...

Don't blame supermarkets for milk crisis...

The crisis in the dairy industry is not the fault of supermarkets, accordin...

16 January 2015 | CLA
Families affected by HS2 face 'major wor...

Families affected by HS2 face 'major wor...

Transport Minister Baroness Kramer visited three rural businesses in Cheshi...

16 January 2015 | Machinery and Equipment
John Deere unveil new 6R tractor range

John Deere unveil new 6R tractor range

Spearheading the John Deere range of mid-size tractors from Mannheim, the n...

14 January 2015 | Animal Health
Monthly TB checks more effective than ba...

Monthly TB checks more effective than ba...

Regular testing for bovine TB could significantly reduce the number of infe...

12 January 2015 | News
Government regulations hampering UK agri...

Government regulations hampering UK agri...

Single-issue policy-making threatens to hamper, not help, the progress of U...

8 January 2015 | Cattle
2015: The year ahead for the beef market

2015: The year ahead for the beef market

2014 has been a “rocky old year” for the beef industry but better prices ar...