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Is the poultry sector for you?

A good stockman could turn their hand to keeping poultry, according to Jason Gittins, consultant at ADAS, speaking at a Farming Connect event at Monmouthshire Livestock Centre.

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However, as a highly regulated sector in regards to welfare, food safety and environmental factors, consideration must be taken to assess whether it is the correct industry for you.


With different production systems for both laying hens and broilers, there is a myriad of options and specifications available, and while red meat and milk markets can be difficult to inspire investment, poultry may be a tempting alternative.


Efficiencies are key to running a successful poultry business, and the level of attention paid to the birds can make the difference between making a positive or negative margin on a crop of birds.


Mr Gittins said: “There is an upward trend in consumption, with the average Briton eating 15 chickens every year, and about 900 million chickens are produced in this country each year, although 40 per cent of the chicken meat consumed here is imported, which largely goes into the catering trade.”

Maximum stocking rate

In free-range systems, there is generally a maximum stocking rate of 2,000 hens per outdoors hectare, although in barn units the limits on flock size have recently been removed, and there is no requirement for range access.


“When building a laying hen shed, there is little difference financially between choosing a single- or multi-tier housing system, however the multi-tier system keeps birds warmer and reduces the bird’s need for feed for maintenance alone,” said Mr Gittins.


“I would work on £30 per bird space to put in the building, excluding the cost of land purchase. So, a 16,000 bird building would cost £480,000, and eight hectares (20 acres) of ground is needed if a free-range system is favoured.”


Egg price can have several variables, including the location of the farm and how many birds it houses. There are several schemes regarding environment enrichment which can also up the price. Some contracts are linked with the price of feed, and so as the price of feed increases, so does the egg price. But currently, the average egg price sits at about 90p per dozen.

Performance

Mr Gittins says: “There is a substantial difference in financial performance between the best and worst performers in laying hens. This difference comes from the quantity, quality and weight of the eggs, feed use optimisation and mortality within the flock.”


According to Mr Gittins, there is a margin of £1.77 per bird to be made, before any costs for finance are taken into account. Targeted production is 300 eggs over 72 weeks.

Broilers

While red meat consumption is falling, white meat consumption is continually increasing, largely fuelled by its low cost and simplicity and versatility in the kitchen.


This sector is dominated by large integrated companies which will use independent producers as well as their own in-house sites.


Mr Gittins said: “A modern broiler house can initially house up to 50,000 birds at one-day-old. These buildings are 110 metres long x 25m wide. Birds are from day-old to slaughter and there are around seven-eight cycles per year.


“Generally, a building costs £220/sq.m which includes the ground work, house and internal fittings, but not the cost of the land. This capital costs equates to around £0.5 per metre per house, and a farm is likely to require two houses.


“There are, however, less financial figures published on the broiler production side of things, compared to laying hens.”


There is a very fine line between success and failure, added Mr Gittins, which he explained was due to the physical performance, largely on food conversion and growth rates. A small decrease in the efficiency of feed conversion rate can have massive financial implications on the enterprise.


In both broilers and layers, it is expected it will take 10 years to make the cost of the shed back, although it may be a slightly faster process in a broiler system, as opposed to layers.


Mr Gittins said: "Systems are becoming increasingly technical and technology-minded individuals may be more suited to running a unit, however stockmanship skills, motivation and attention to detail are still vital attributes in any poultry producer."

Budget sensitivities of free range laying hen systems

 

Average performance at 89.5p/dozen (£) Higher performance at 89.5p/dozen (£) Higher performance with a £+2 price bonus
Egg sales 22.38 (300 eggs) 22.82 (306 eggs) 23.33 (306 eggs)
Old hen value 0 0 0
Total sales 22.38 22.82 23.33
Pullet 3.86 3.86 3.86
Feed 1.79 (130g) 11.06 (122g) 11.06 (122g)
Other costs 4.96 4.96 4.96
Total cost 20.61 19.878 19.88
Margin per bird per cycle - not including finance charges 1.77 2.94 3.45
Margins per annum 1.59 2.64 3.09
SOURCE: ADAS
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