Hereford-based Cargill is expected to need 90 new poultry sheds as part of development plans to meet a rise in poultry consumption — poultry is expected to account for more than half of our meat intake this year, up from just over a third 20 years ago.
And farmers such as Andrew Davies, who has been rearing broilers at Aberhall Farm near Ross-on-Wye since 2001, are supporting their expansion by incorporating renewable energy production into plans.
“Adopting renewable technology simply restores poultry margins back to where they should be,” he explains. “Costs of production have gone up but returns haven’t kept pace, so income from renewables is becoming pretty important in poultry enterprises where margins are typically squeezed.
“Without renewables you’d be looking at 15 years or more to pay back the investment in a standard shed; with renewables, this is nearer six years if you can get your costs right.”
Andrew has installed 198kW boilers to heat his six sheds; each takes a multi-fuel feedstock of anything from wood chip to miscanthus – also known as elephant grass – rape straw and poultry litter (thanks to recent Environment Agency approval), increasing his ability to deal with supply issues or future price rises.
Further insulation from fluctuations in biomass feedstock markets will come from 8ha of his own miscanthus he has planted for the first time this year. “The miscanthus will be due for its first harvest in two years’ time, and with yields of about 20 tonnes per ha per year expected over the next 20 years, this should leave us about 15 per cent self-sufficient in energy crops at our current rate of use,” he explained.
“This means we will be less reliant on wood chip, which we currently source as timber offcuts from Forest of Dean. It’s a great local supply, but the price has recently risen to £31 per tonne and we still have to pay for chipping on top of that. So it definitely pays to keep your options open by making sure the boiler can run on a variety of materials.”
He says the underfloor heating installed in the last of his sheds has proven especially beneficial during the initial 18 days of the production cycle. “It might add £55,000 to capital outlay, but before a batch of chicks arrives in cold weather, it can take 25 per cent less energy to get the shed up to temperature.
“Then it dries the litter out better, lowers ammonia levels, reduces odour and keeps an even temperature across the whole shed. I’ve seen perfect chick distribution in that shed – even on the coldest of days an hour after chicks arrive – and a reduction in podo-dermatitis incidence.
“The only thing to watch is controllability – avoid letting temperatures get too high as it’s not easy to turn the heat down once you’ve heated what is effectively the giant concrete slab on the floor.”
Photovoltaic panels have also fitted well in Andrew’s system. Luckily, his existing sheds already had south-facing roof space and he was able to install a capacity of around 250kW with little difficulty.
“The cost of buying and installing 250kW photovoltaic panels is about £1,000 per kW – about a third of what it was three years ago, making it far more affordable and taking up less borrowing capacity.
“We estimate that the panels take around a third off power costs in the summer months.”
Investing proactively to take advantage of emerging opportunities is good practice, says AMC’s regional agricultural manager for Herefordshire, Martin Waite, and is one of the reasons farmers might have already had poultry production on their radars.
“We’re seeing applications for borrowing come into AMC for three reasons. One is our access to European Investment Bank funding, which allows us to discount loans by 0.8 per cent over the first ten years for eligible projects, including many that are poultry-related. A second is expansion of existing operations, and a third is the opportunity to fit a new enterprise into an existing business, which for many farms makes a great deal of sense. New poultry developments on farms with arable operations are proving particularly popular.”
He says there are very significant advantages in mixing a livestock enterprise like poultry with a cropping enterprise, such as cutting back on artificial fertiliser use and reintroducing organic matter to the soil through use of the poultry manure.
Roof space can be used for photovoltaic (PV) panels and for heating, attracting feed-in tariffs and funding.
“Aside from impact on feed prices, poultry production also remains largely immune from the effects of the weather,” he adds. “This is proving to have growing appeal for farmers fed-up of one set of extreme weather conditions after another in recent years.”
Mr Waite says two 100-metre x 26-metre basic sheds, housing 55,000 birds each, will set most farmers back about £1.1 million, providing a six per cent return on capital based on today’s costs of production; kitting out fully with PV panels and could take this cost nearer £1.7 million, with loans sizes varying depending upon capital contributions available within the existing business.
“Biomass boilers vary hugely in price depending on their capacity and feedstock,” he explains. “You basically get what you pay for, with small boilers fed off a pellet line coming in around £30,000, up to large-capacity boilers capable of using a multitude of fuels at about £100,000.
“The benefit of multi-fuel is you are protected against any one fuel source becoming too pricey. You also need to add over £50,000 per shed if you want underfloor heating and around £1,000 per kW for a PV installation.”
Against this level of investment, he says, one might expect a ten to12 per cent return on capital depending upon efficiency, although some top-end producers are achieving considerably more than this. “As you scale up, the efficiencies improve and many potential producers look at a four-shed development as the ideal starting place — provided there are no planning barriers dictating otherwise.”
Cargill’s agriculture director, John Reed, says there is real confidence in the chicken market, boosted in no small part by the commitment from several retailers to buy British in the wake of the horsemeat saga.
“There are still significant opportunities to increase production, hence our confidence in investing in growing capacity.
“What surprised us was the uptake by farmers in Herefordshire after our announcement. Several approached us straight away to say they already had planning permission and were ready to build. It’s clearly something they had already been considering and were just waiting for contracts to emerge.”
keep last two pars plsBut how close to self-sufficiency are we following Tesco’s very public pledge last February at the NFU conference to buy 100 per cent British and Irish chicken as part of a raft of ‘radical’ changes following the horsemeat scandal? Mr Reed says Britain is still a long way off. “We do export large amounts of dark meat but wWe are nowhere near self-sufficient in breast meat — that demand will continue to grow.”
Jeremy Jehan from Hereford-based chartered surveyors Brightwells says clients of his who have applied for planning permission to expand facilities have encountered relatively few problems to date.
“Herefordshire County Council has been very positive about the overall economic impact and jobs that will arise from the County’s farmers responding to this opportunity. However, there’s no doubt that expanding an existing operation will get an easier ride than a new development on a greenfield site, and smaller expansions are easier than large ones.”
Read More: Biomass Boiler