Despite operating in one of the highest value-added markets in the EU, the UK poultry industry is suffering from high feed prices, limited volume growth and oversupply. That is the view of Rabobank which sees the industry at a crossroads, with the way forward including further consolidation, greater efficiency, better supply discipline and what the bank terms further internationalisation.
Rabobank's dissection of the poultry industry concludes the retailers are in the driving seat because of over-supply and it is for this reason it says consolidation is necessary to match production more closely to retail.
"The current structure of the industry is not sufficiently effective, especially not when it comes to competing with powerful British supermarkets. The principal elements which will separate the winners from the losers over the next few decades include increased focus, wise investments in efficiency and more integration with the north-western European poultry industry."
Only the 2 Sisters Food Goup, says Rabobank, is benefiting from a north-western European network for sourcing fresh meat. "We expect others to follow this trend in the coming years in order to achieve maximum efficiency and flexibility."
It says the UK industry is less efficient than similar industries in exporting countries such as the Netherlands and Germany and it says any increases in our domestic demand for poultry meat merely reflect population growth.
"The UK poultry market is close to its maximum absorption level, since per capita consumption (22.8 kg per head for broilers, up from 17.4 kg per head in 2010) is no longer showing any real increase and total volume growth is only coming from population growth."
And Rabobank also believes our export achievement still underperforms by failing to capitalise on the depreciation of sterling and new marketing standards for fresh poultry.
Source: Farmers Guardian
