Why chicken is getting more and more expensive

Source:  ВВС
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Chicken is the UK’s meat of choice for the dinner table, but consumers might have noticed the numbers ticking up on their receipts.

With the cost of chicken feed, energy and transport increasing, fast food chains like Nando’s and KFC have already put some prices up.

The boss of Co-op supermarkets has warned poultry could become as expensive as beef, while official figures suggest that the price of chilled, oven-ready, chicken has increased from £2.50 to £3 per kg in the last two years.

“The problem we have is that all kinds of prices are going up and up,” says poultry farmer James Mottershead.

His family bought the West Midlands farm in 2001.

In recent years, demand has grown and the business now raises about 1.5 million chickens a year.

We follow the production process step-by-step to see where costs are mounting for poultry farmers and processors.
Poultry makes up 50% of the meat eaten in the UK and one billion birds are reared in the country every year, according to the British Poultry Council.

Mr Mottershead, who is also the chair of the poultry board at the National Farmers’ Union, receives deliveries of about 215,000 chicks in seven “cycles” each year.

The broiler chickens, raised specifically for meat, arrive at the farm at one day old.

The price for the chicks has gone up by 5p over the last year though, with the cost now topping 40p per bird, Mr Mottershead says.

Hatcheries have come under pressure as costs for feed, electricity and heating for the incubation period have gone up, and those are being passed on to farms.

Mr Mottershead and two dedicated full-time employees look after the chicks that are then grown in dedicated poultry sheds.

Day-to-day costs are going up there too.

Staff start on-site at 07:00, checking water consumption and feed availability, as well as on the birds’ health.

All of the birds on the farm are sold as Red Tractor assured, which means each chicken can be traced back to the hatchery it came from and it has 10% more space than is required by European legislation.

The farm generates renewable energy. The commercial sheds use LED lights and have solar panels on the roof. Despite that, Mr Mottershead says electricity prices have “rocketed” in the last year, with the cost per kilowatt roughly doubling.

Some of the sheds also have LPG gas containers for heating. Prices now top 40p per litre, up from 15p two years ago – driven higher by Russia’s invasion of Ukraine and worries about the impact the conflict could have on supplies from one of the world’s biggest gas exporters.

The farm uses borehole water, but the cost of chemicals used to sanitise the water has risen by about 30%.

The business also goes through about 200 tonnes of wood shavings for the chick’s bedding each year. The cost of buying that in bulk has jumped by about 40% in the last 12 months.

Aside from wood shavings to scratch, the cost of feed, which makes up a large proportion of a poultry farmer’s budget, is soaring.

The farm’s spend on it now stands at about £2m a year. Different types of feed ingredients are used depending on the chicken’s stage in its life cycle – whether that’s a chick crumb or a grower pellet for later on.

Kynan Massey, managing director of Massey Bros feed firm, told the BBC “prices had never been higher”.

It’s because the feed is often made up of wheat or soya, which have seen prices spike due to failed harvests last summer and the conflict in Ukraine.

“Russia and Ukraine are responsible for a quarter of wheat exported around the world,” Mr Massey says. “If conflict continues we could see prices carrying on rising, and in Europe the dry weather is affecting costs as well.”

In the poultry sheds, the birds’ weight is monitored regularly.

The number of birds is reduced at 32 days once they have reached their target weight to ensure the farm is meeting rules on density per square metre.

About a third of birds in the shed are sent to the abattoir then, with the rest of the chickens removed at 39 days.

They are transported by truck in crates. Of course, the cost of fuel has also gone up.

UK diesel prices, for example, rose to a record of just over £1.80 a litre on Monday, according to the RAC.

After the previous record of £1.79 in March following the invasion of Ukraine, prices dipped but have risen again in recent weeks.

And it’s been more difficult to find a lorry driver. The shortage has been blamed on a combination of factors, including the pandemic, Brexit and tax changes.

Wages have soared as a result, with annual salaries offered by some haulage firms reaching £80,000.

“The reality is that when you have a shortage, people can name their prices,” Mr Mottershead says.

In UK processing plants, most chickens are now killed using gas – usually carbon dioxide, a by-product from the fertiliser production process.

Gas prices were already going up last year, forcing big fertiliser factories in the UK to suspend production.

Although the UK produces about half of its own fertiliser, costs have been driven up more because of conflict further afield.

Russia is a huge producer of the key ingredients needed for fertiliser, like ammonia, so fears over supplies have a knock-on effect on CO2 prices.

2 Sisters, one of the UK’s biggest chicken suppliers, told the BBC it had seen the cost of CO2 nearly quadruple.

After the chickens are killed, they are defeathered, cleaned and packaged by agricultural workers. 2 Sisters says the cost of card packaging has also gone up by 20% in recent months.

Producers are spending more on labour in the plants due to an increase in the National Minimum Wage as well. Others are offering higher salaries to attract workers amid ongoing labour shortages.

Eventually, the packaged chicken will be sold to clients like butchers, corner-shop chains, manufacturers or supermarkets.

But Ronald Kers, the boss 2 Sisters, has said input costs before this point have rocketed.

“Prices from the farm gate have already risen by almost 50% in a year,” the company which has 600 farms and 16 factories across the UK, said previously.

It warned the days of lower prices are coming to an end.

Mr Mottershead points out that although some poultry producers are struggling, supermarkets are hesitant to pass on costs to their customers as the cost of living increases.

“We’re doing all we can to produce quality chicken and egg products, but there’s a huge amount of farmers who won’t be able to restock their sheds because that cost is too great,” he says.

Russia’s war in Ukraine has made existing shortages “even worse”, he suggests.

For poorer families and countries, “the realities of this don’t bear thinking about”.

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