The chair of the Ulster Farmers’ Union (UFU) poultry committee is a busy man. Ronnie Wells has a lot happening on his farm near Moira, with poultry, arable and suckler beef enterprises to manage.
Like the farm work, the agenda for the UFU poultry committee is wide-ranging and seemingly never-ending.
A key issue is the immense change that is currently taking place in the egg sector. It stems from UK supermarkets moving away from stocking eggs that come from hens in enriched colony cages.
The main retailers have committed to being cage-free by 2025, with most making the announcement back in 2016 after 14-year-old animal welfare activist Lucy Gavaghan started an online campaign.
Debt is still being paid off on that investment and, for many producers, it won’t be cleared by 2025
“In 2012, legislation was brought in to move away from the old battery cage. At that time, UK farmers spent £400m investing in new colony egg production systems,” Ronnie explained.
“Now they are told less than eight years later this system will be obsolete by 2025. Debt is still being paid off on that investment and, for many producers, it won’t be cleared by 2025,” he said.
The issue became worse earlier this year when Tesco, the UK’s biggest retailer, announced that it was taking its pledge further by applying it to all eggs that are used in food products in its stores, and not just eggs that are available in retail packs.
The direction of travel is for a significantly smaller market for eggs from hens kept in enriched colony systems.
It could effectively just leave the food service sector, which accounts for less than a quarter of the UK egg market. Over half of eggs go to the retail sector and the remaining fifth of the UK market is for manufactured food products.
Eggs from barn systems, where birds can move throughout the shed, appear to becoming the new “value” option for UK consumers. Free-range production, where hens have access outside, is the next step above that.
“The fear among producers who are contemplating investing in a barn system is what happens if the retailers decide in a few years’ time that they don’t want barn egg anymore. It would be another big investment gone,” Ronnie said.
Some supermarkets are suggesting that the barn egg should be sold at the same price as the current colony egg
A switch to free-range production is out of the question for many producers if they do not have the required land area surrounding sheds.
“Some supermarkets are suggesting that the barn egg should be sold at the same price as the current colony egg, even though producers have reduced stocking densities and increased labour costs,” Ronnie said.
The concern for free-range egg producers is that the phasing out of colony eggs, coupled with a reluctance of producers to invest in barn systems, leaves free-range egg as the main product on supermarket shelves, which would erode its price premium.
The UFU poultry committee is seeking guarantees from retailers that barn eggs will have a long-term market, free-range products will command a premium and that the lower-tier egg market will not be served by cheap imports.
There was widespread uptake of the Renewable Heat Incentive (RHI) within the poultry sector in Northern Ireland, but when tariffs were cut due to a projected scheme overspend, farmers became the big losers in the saga.
The scheme was set up in 2012 and participants were paid tariffs for using renewable fuels to produce heat. Poultry producers availed of RHI to switch from heating sheds with gas brooders to using hot water systems fuelled by wood pellets.
No cost controls
However, the scheme had no cost controls and when a projected overspend emerged, previously guaranteed tariff rates were cut for all claimants in 2017.
The most common installation under the scheme is a 99kW biomass boiler.
Calculations by the Renewable Heat Association, the representative group for RHI claimants, indicate that the maximum annual payment for a 99kW boiler fell from £22,400 to £12,140.
Further cuts were applied in 2019, when the maximum annual payment fell to just £2,340. The Department for the Economy is currently drawing up proposals to close the scheme early, despite payments initially being guaranteed for 20 years.
“It’s absolutely ridiculous. It has put a lot of poultry producers in financial difficulties. I know some producers who have had to sell land and machinery to pay off pellet suppliers and loans for boilers,” Ronnie Wells said.
With a similar scheme still operating in Britain, Ronnie maintains that the local poultry industry has been left “uncompetitive” with the rest of the UK.
Legal proceedings over the tariff cuts are being led by the Renewable Heat Association and local politicians continue to be lobbied about the future of the scheme.
“The poultry committee, along with the Renewable Heat Association, are working hard to get the best deal possible for our industry,” Ronnie said.
“The biggest bird flu risk to the industry is poultry keepers with backyard or hobby flocks. A lot of these people don’t realise that if they had food sitting outside for their hens, a wild bird with avian influenza could fly down and leave its droppings near it.
“The person looking after the birds then picks it up on their feet and spreads it into someone else’s yard. If avian influenza gets into the commercial units, it will devastate the industry. It is very, very serious.”
“It has become almost impossible to get planning permission and there is a lack of clarity around the planning process for poultry producers. With planning costs, those who want to enter into the sector or expand have a huge investment to make before seeing any returns.
“There is going to have to be change. There are millions of pounds that could be spent in the local poultry industry through new housing, investment and labour. We feel we are being held back by planners and government.”
“Demand for eggs is very good at the moment, even with the food service being recently closed down. There might be some concern that the free-range egg market could become oversupplied with the number of new houses recently built, and more in the planning system.
“On the chicken side, demand is good both here and in Britain. Consumer demand is strong for local chicken because they know it is produced to a high standard and Red Tractor quality assured.”
“A concern across all UFU committees is the outcome of Brexit and new trading arrangements with third countries. The last thing we need is eggs or chicken coming into the UK which is produced to lower standards than ours. As chair of the poultry committee, I will not stand back and let this happen without a fight.”