UK layer production woes could undermine feed demand
“The poultry sector makes up the largest share of animal feed demand within the UK. However, with tight margins for layers and avian flu still prominent, as well as the aftermath of COVID-19, we have seen poultry feed production decrease this season,” noted a report by the AHDB.
For layer production, the rise in inputs is not being matched by a higher purchase price from retailers to compensate, which is leading to some businesses to cut production while others exit altogether, said the organization.
“According to a survey carried out by the British Free Range Egg Producers Association (BFREPA), in mid-April, 51% of farmers said they would consider stopping production until prices improve, with more than 70% saying they would leave egg production altogether within a year if a price rise from retailers did not happen.”
Looking at the latest UK Department for Environment, Food and Rural Affairs (Defra) data, since December, placings of commercial layer chicks have been down considerably on year earlier levels, which means that there will be a further contraction in domestic laying flock, reads the review.
“Feed for layers makes up around 20% of total poultry feed production in Great Britain (GB) [England, Scotland and Wales] and around 10% of total GB animal feed production. If we do see a further contraction in the domestic egg laying flock, then this will have an impact on feed production, and in turn a reduction in cereal usage.”
UK poultry diets are made up of around 65% cereals, with wheat as the majority of that. Some barley is used, but to a much lesser extent; more maize tends to be used more in Northern Ireland, however, due to its price competitiveness, as per the outlook.
Broiler feed consumption outlook
For the UK broiler segment, where feed demand is typically biggest, the outlook is slightly more optimistic, if only in the short term, found the report.
All meat proteins have seen a decline in retail as UK shoppers move back to eating out, but poultry is performing better than the total market, according to data from Kantar cited in the outlook.
Between January and March this year, the AHDH saw that commercial broiler chick placings in the UK increased by 6.6% on 2021 levels to 323.7 million head.
From a feed perspective, broiler chicken feed makes up nearly 60% of total poultry feed production in GB, and accounts for over 25% of total animal feed production. In volume, broiler feed production alone is higher than total domestic pig feed production.
With demand looking likely to remain relatively strong for broilers at least in the short term, feed demand is likely to remain robust too. However, with soaring input costs for producers and processors, there may be more uncertainty in the mid to long term around the strength of growth by the broiler sector, said the AHDB.
“With ever increasing input costs and the wider cost of living crisis, we could see broiler demand for feed stall if consumer demand falters or margins get squeezed further.”
