Poultry Council Report November 2021

Market report 

While retailer demand for poultry, chicken in particular, surged during initial Covid-19 restrictions in March 2020, demand slipped in summer 2021 and the lack of foodservice has resulted in reduced throughput overall in recent months. While broiler processors, namely Manor Farm & Western Brand have sought to recoup the rising cost of feed and other processing production cost from retailers during 2021, the wholesale price has not increased sufficiently to cover all processor increased costs, let alone cover the huge increase in grower costs at farm level.

Additional costs associated with all the challenges that both Brexit and Covid-19 continue to place on the sector, from the farmers yard right through to deliver to central distribution depots need to be recouped from the food chain to prevent the sector going into decline. 

The increase in commodity grain and protein feed costs has resulted in a squeeze on margins that has not been recouped through the food chain. In order for Irish poultry farmers to get justified increases in their payment terms this needs to be addressed as a matter of urgency. The need for a food ombudsperson with statutory powers of enforcement is critical to controlling the power of a small number of retailers that have reduced the viability of poultry Irish farmers. A Bord Bia quality assured 2kg whole chicken retails at €4.50 c/kg. This is not enough to pay sufficiently for all the transport, packaging, processing and most importantly the farmer for growing this chicken. 

The egg market continues to be in over supply for certain grade classes. The importation of eggs continued until March 2021. This has resulted in a backlog of eggs. Also, the construction of new units in the last number of months has also exacerbated the problem. These units were given the go ahead based on a sales spike during the first covid lockdown. Sales this year seem to have retracted with most packers carrying surplus stocks at the minute.

Like other sectors the increase in input costs has been heavily felt. Packers have covered feed increases somewhat but it’s the invisible cost increases that are causing the most problems (replacement birds, electricity, labour etc). All main retailers have been contacted by IFA regarding the urgent need for a wholesale increase in egg price.

Poultry Working Group (PWG) 

The proposal to create the fund, which is fundamentally a concept that the IFA do support, there are details which need clarification. All stakeholders and vested interests in the poultry industry, from processors, vets, feed milk and transporters must share the burden of creating.  While producers support the idea of a fund there are a lot of hurdles to be cleared. At present the Egg association members will not contribute from the packing businesses only for their own stock, leaving the full cost to fall back on the farmer. Also, it was raised at the last meeting that one company may introduce a compulsory levy for its suppliers towards the fund. We cannot condone this being imposed on producers.

Low Pathogenic Avian Influenza & ILT

ILT has been a major problem this year especially in Monaghan where a large number of flocks have been affected. A vaccination programme is underway, but it will be sometime before the effects are evident.  Avian Flu has appeared again with a recent case in a wild bird in Co Galway. This still remains a huge threat to producers with no compensation for low pathogenic AI.  It is paramount that strict biosecurity measures are implemented on all farms and for individual sheds.

Broiler Package Negotiations

Manor Farm grower committee met with management recently and put forward a strong case for a significant increase in the payment terms for broiler farmers. This engagement has been slow and tedious, as have similar negotiations with the other two main chicken processors. The feedback remain that without significant wholesale price increases from all retailers, the broiler sector cannot be sustained at current production levels.  IFA are continuing to support all broiler, breeders and rearer producer groups in engaging with processors and assisting in the case for much needed payment package improvements.