Farmer in intensive chicken house (Herefordshire) CJW

Source: Whittern Farms

Average prices rose by almost 15% last year but needed to increase further to safeguard the sector, producers have warned

Supermarket chicken prices remain artificially low – despite big supermarket price hikes over the past year – and many producers remain on a financial knife-edge, the boss of major processor Avara Foods has warned.

The average price of supermarket chicken rose by 14.4% last year, according to The Grocer’s Top Products survey data [NIQ 52 w/e 9 September 2023].

And in response to growing fears over the sector, Rishi Sunak this week confirmed the government would launch a supply chain review of the poultrymeat sector. It follows similar probes into conditions and fairness across dairy, fresh produce, pork and eggs over the past two years.

However, the increase in returns from the category’s inflationary price hikes remained dwarfed by the rising costs experienced by producers, suggested Avara CEO Andy Dawkins.

“Margins [for producers] have increased over the past year with processors now recognising the real financial stress faced by them,” he said.

“In the short term, if we hadn’t done so, some growers may have said it’s not worth it anymore,” he added.

Read more: Sunak promises annual food security review at NFU Conference

“But producers still need to invest to maintain farming standards but with the background squeeze from rising wages, borrowing and infrastructure costs, this will continue to be a very painful period for many,” Dawkins warned.

“Chicken is still too cheap and all of us will need to pay more to keep agri supply chains sustainable. Shoppers are not yet seeing the true end-to-end cost at the shelf edge.”

His comments were echoed by Jo Hilditch, MD of Herefordshire-based chicken producer Whittern Farms, who warned the broiler sector remained “precarious” and could still suffer the same issues recently faced by the egg sector.

“Whilst costs have come back a little and liveweight prices have marginally improved we are highly invested and this needs a long-term commitment to the quality product that we, as British farmers supply,” she said.

“I have heard of a few growers who are clear of debt and have no succession plans in place who are closing sheds or reducing production.”

Read more: New dairy regulations and farmer protection could be adopted by other categories: NFU

Hilditch added that chicken producers would end up going out of business if margins were not “at least sustained or improved”.

“We need to take a host of measures such as environmental protections and the high cost avian influenza insurance, which are going to cost us and need to be covered through improved margins” she urged.

Dawkins and Hilditch’s comments follow similar concerns voiced by 2 Sisters Food Group president Ranjit Singh Boparan on several occasions over the past two years.

It comes as NFU research published last week revealed 15% of producers were unlikely or unsure they would still be producing beyond November 2025.