JUNE UPDATE

EUROPEAN MARKETS Avian Flu Update ?-

Free Range birds in the UK have now been allowed to go outside along with Ireland, Scotland, and Wales.?As of this week, Belgium will also release birds to go outside, and it is expected that other Europe countries to follow; however, there are concerns as increases of Avian Flu are being detected in wild birds, the main concern is in Gulls.

Most countries around Europe are conducting tests and trials with regards to vaccinations against Avian Flu and hopefully this will be the start of a programme that will help to control the spread of the disease.

According to a report by Poultry Network – https://poultry.network –

EUROPEAN and UK authorities have warned of high levels of avian influenza in wild gulls.

The European Food Safety Authority’s (Efsa) latest outbreak assessment says that black-headed gulls, which breed inland, could increase the risk for poultry in July-August.

However, total outbreaks across the continent have dropped in the first quarter of this year and are both lower than the previous quarter and the same quarter of 2022.

Defra added in its most recent assessment that black-headed gulls were “over-represented” in the European detections, which it said was of note.

In the UK, between mid-March and early May, most wild bird detections (48) were in gulls.

UK cases - In the past month, there have been three avian influenza outbreaks on commercial poultry farms, two on broiler breeder units in Lincolnshire and one in Sussex.

Efsa said: “Abnormal mass mortality in gulls was observed in countries such as France, Belgium, The Netherlands, and Italy.

“The risk of infection in poultry may increase in the coming months as gulls spread inland, possibly overlapping with poultry production areas.

“EFSA and EURL recommend that prevention strategies should be implemented in poultry production areas.”

Most countries around Europe are conducting tests and trials with regards to vaccinations against Avian Flu and hopefully this will be the start of a programme that will help to control the spread of the disease.

Oliver Grundy, from JHG Planning, agreed, saying the sector had not improved massively: “We still see high materials and energy costs precluding big investments in new units, although it is slightly busier than last year.”

An 18-month struggle

Martin Humphrey of?Humphreys Feed and Pullets?said that while there were few new building applications in the pipeline, the company was at full capacity for pullets until year-end.

“So many producers have fallen out of the natural cycle, either due to putting a halt on restocking until the prices improved or because of an enforced absence due to avian influenza or salmonella. However, as pullet rearers, we cannot just switch on production to meet unplanned new demand. Other rearers are similarly full. It is just not possible to suddenly ramp it up as demand comes back.”

As a result, the industry expects empty shelves with retailers struggling to source UK eggs for up to a further 18 months.

The UK prime minister, Rishi Sunak, to make good his promises to farmers and producers that they “will have what they need” to ensure a sustainable and secure supply of world-class food for all. If that doesn’t happen, the UK will move into a 2-tier food system with many consumers forced to rely on imported food.

Production prices are starting to move down slightly and so is feed with still a long way to go before we get anywhere need to 2022 prices but we’re heading in the right direction.

?The markets are starting to ease at last with continued declines in prices; however, availability still does appear to be tight.?Cost of production seems to be easing due to changes in feed and other areas which is helping to bring costs down.

The main areas of concern is the replacement of lost flocks.?According to reports from the Poultry World website recover is still going to take some time.

Robert Gooch, chief executive of the?British Free Range Egg Producers Association, said many UK producers had halted production to avoid selling at a loss. “Last year, it cost us ￡1.40 to produce a dozen eggs, but the supermarkets insisted on continuing to pay just ￡1.” He added that similar British legislation could have been used, but the UK government chose not to: “Our government is more interested in cheap food than food security,” he said.

Towards the end of last year, supermarkets began to offer more money to UK producers, but by then, destocking meant that there were fewer hens around.

High borrowing rates

Stock repopulation is taking place, but there has been little appetite in the UK for new builds or extensions due to the high borrowing rates and inflation build costs. This has changed slightly in the past 6 weeks, according to Ian Pick of specialist planning consultants?Ian Pick Associates. But, there is a long way to go.

“We certainly have not been inundated with enquiries for any free-range building applications, either as new builds or extensions. Given that borrowing rates are still upwards of 6% and with 40% inflation on build costs, we have a long way to go until recovery starts to take effect,” he told specialist media.

The UK is extremely tight as the recovery is very slow in additional flocks coming on board but there has been an increase from March.?This upturn can be expected to continue into at least September in light of the latest placings figure for April, which shows a year-on-year increase in day-old pullets of 12 per cent, or 380,000.?By the autumn, the size of the UK laying flock should have increased by 1.3m overall since early this year. However, that still leaves the egg market some 4m birds adrift of where it was at the beginning of last year, which leaves a considerable gap to fill looking well into the following year.

The supply both from the UK and EU will remain tight / short for the demand required across all markets both in retail and processing and I can’t see much significant movement until we get in 2024; that said if the retailers maintain their view of moving to all caged free the situation is even harder to predict.

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