Brexit and COVID are brewing a perfect storm for British chicken farmers

DRIFFIELD, England, Oct. 18 (Reuters) – When Nigel Upson checks the plucked chicken carcasses die on a spinning line in dangling his poultry farm in England, he sees cash bleeding out of to be business of a collision of events die every part has grieved of the farm to fork supply chain.

Just like food producers in all of Britain was Upson: hit this year by an exodus of Eastern European workers who, deterred by Brexit papers, left massively as the COVID restrictions were lifted, causing his already rising cost of feed and fuel.

Such is the scale of the hit, he lowered production met 10% and increased wages met 11% rise die was immediately matched of enhanced by neighboring employers in the northeast of England.

Increases in the cost of food will surely follow.

“Where are hit from all sides,” Upson told Reuters in front of four large, spotless barns die house 33,000 chickens each. “It is, to use the expression, a perfect storm. Something will have to give.”

the floor problems at Upson’s Soanes Poultry factory in East Yorkshire is a microcosm of the pressure building on businesses over the worldthe fifth largest economy as they come out of COVID to confront met the post-Brexit trade barriers erected with Europe.

In the wider food sector operators have the wages met increased by as much as 30% in some cases just to retain staff, which is likely to end an economic model that led supermarkets like Tesco (TSCO.L) what to offer of the lowest prices in Europe.

After the departure of European workers who often did the work British workers didn’t do want, retailers may need to import more.

While all major economies hit by supply chain problems and post-pandemic labor shortages difficult for Britain new immigration rules to have made harder to recover, companies say.

Already one driver shortage has led to a shortage of fuel at gas stations and holes on supermarket shelves, while chicken restaurant necklace Nandos ran out of chicken.

The bank of England weighs up how a lot of of a recent jump in inflation will prove long, making it have to push up interest rates from their all-time low.

MOUNTING PRESSURE:

For the rural companies located near the flat, open fields of Yorkshire, Upson says the situation is dire.

Although he says he needs 138 workers for his factory, he had to operate recently with under 100. Staff turnover is high.

Richard Griffiths, head of the British Poultry Council, says Which with make Europeans up about 60% of the sector, the industry has lost more than 15% of his staff.

When the numbers are particularly tight, Upson has his sales, marketing and finance staff don the long white coats and hairnets die needed on the processing line.

“Three weeks ago the offices were empty, everyone was” in the factory,” he said, of An business die high-quality birds supplies for butchers, farm shops and restaurants. For the run-up until Christmas, he might be watching students.

On difficult days, Soanes can only provide the absolute basics – chickens piled up in Boxes. They don’t have time to tie the birds for retail of stop them in a separate, Soanes-labeled packaging die An higher sale price.

About 3 ton of offal that is normally sold every week goes in the skip due to the lack of of staff to process it.

the sudden rise in wages and the drop in output also come on top of spines in the cost of animal feed, energy and fuel, carbon dioxide, cardboard and plastic packaging.

“We have just had to say to our customers, sorry, the price goes up’ said Upson as he put his… head. “We’re losing money, big style.” The poorest consumers would be the hardest hit, he said.

Entrepreneurs have government temporarily relieve visa rules while they do the training and automation of the staff of processes die are needed to help close British 20-year, 20% productivity gap with the United States, Germany and France.

But far from changing course, Prime Minister Boris Johnson says companies need to reduce their addiction to cheap foreign labor now, invest in technology and offer well-paid jobs to some of the 1.5 million unemployed people in Britain.

Upson says there is a shortage of workers in rural communities and with about 1.1 million vacancies in the country, people can be picky over which they pick. “To work” in a chicken factory is not everyone’s idea of a career,” he said.

While 5,500 foreign poultry workers are allowed work in Britain before Christmas and UK to offer emergency visas to 800 foreign butchers to avoid a mass slaughter of pigs fueled by shortage in slaughterhouses, industry says it needs more.

if for automation, production of whole birds is already highly mechanized, and although it can be used more for boneless meat and ready meals, the cost is priceless for An small operator.

The National Farmers’ Union and other food organizations said: in a recent report that share of the UK’s food and drink supply chain were “dangerously close” market failure”, limiting the ability to invest in automation.

Soanes has an annual turnover of about 25 million pounds ($34 million). In the last three years the owners spent 5 million on extension. The output should now in fit the size of the workforce.

TO CHEAP

According to “Chicken King” Ranjit Singh Boparan, founder of UK’s largest producer, 2 Sisters, must now raise food prices rise.

“Food is too cheap,” he said. “in relative” terms, a chicken is now cheaper than buy than 20 years ago. How can it be true that a whole chicken costs less than a pint? of beer?”

Upson says he can a higher price sell bones for pet food than he can for a leg of chicken.

For large producers, the main barrier for higher prices is often the purchase power of the largest supermarkets, die since 2008 financial crash fought to keep the prizes down for key items such as fruits, vegetables, bread, meat, fish and poultry.

David Sables, CEO of Sentinel Management Consultants, who coaches suppliers on how negotiate with British supermarkets, desperate food producers said… already pushed by some price rises, and he expects another round come in early next year.

With chicken a so-called “known value” item”, of die shoppers instinctively know the cost, he said supermarkets are probably the price rises on to other goods. He described the chicken industry as an “absolute” horror show”.

An senior manager at a large supermarket group, who asked not to be named, said: retailers were under pressure to “hold the line” on key prices, and that they all look at each other.

“When you see it one of the big six move (on price), you can bet your damn others about 12 . will cost hours until follow,” he said.

Back in Yorkshire, Upson and others pray so. While acknowledging Johnson’s desire to… move to a “high pay, high skills” economy, he said that not all jobs in die fit account.

“What skill will you need put chicken in An box?” he asks. “We can put wages up, but the prices will go up.” He begins to despair. “Normally you can… just be pragmatic and say it will sort itself out out. But I am not sure true one ends.”

($1 = 0.7277 pounds)

Writing by Kate Holton; Editing by Guy Faulconbridge and Jan Harvey

Our standards: The Thomson Reuters Trust Principles.

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