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The biggest challenges facing the poultry industry

The poultry industry plays a crucial role in the global food system. Currently accounting for over 40% of global meat consumption and providing employment to more than 12 million people worldwide, the industry is experiencing remarkable growth and is expected to increase from $360.5 billion in 2023 to $494.55 billion by 2028.

However, the industry faces significant challenges that could impede its continued growth and sustainability. Disease outbreaks, rising feed costs, consumer demand for alternative proteins, environmental concerns, and labour shortages are all significant issues that demand attention. Consequently, the industry must adapt to these challenges to ensure its continued growth.

Disease

Outbreaks of disease, such as highly pathogenic avian influenza (HPAI), represent a persistent threat to poultry production. These outbreaks can result in significant economic losses, the culling of infected flocks, trade restrictions, and reduced consumer demand. Recent HPAI outbreaks have had a devastating impact on the poultry industry, leading to the culling of millions of birds globally. In the USA alone, HPAI outbreaks have resulted in the loss of over 79 million birds across 47 states since February 2022.

The impact of disease outbreaks has been amplified by the consolidation of poultry farms, as fewer farms now house larger flocks. With this increase in size and flock density, the potential for the rapid spread of diseases and substantial losses also increases. Additionally, consumer fears over avian influenza can significantly impact poultry consumption and trade, even in countries not directly affected by outbreaks.

To tackle this threat, poultry farmers and integrators are actively engaged in implementing various strategies to combat disease, such as instituting strict biosecurity measures, developing vaccination programs, and building early detection and response systems. This has been greatly facilitated by advancements in automation and AI, as both of which enable more effective monitoring, analysis, and disease response.

Environmental impact and sustainability

Although the poultry industry’s carbon emissions are lower than those of beef, pork, or lamb/mutton, it still faces the challenge of reducing its environmental impact. The carbon footprint of poultry averages approximately 6.0 kg CO2-equivalent per kilogram of meat. While chicken is still seen as an environmentally friendly alternative to other meats, the advent of cultivated meat may adversely impact this. The FDA’s recent approval of cultivated meat in the American market, and the possibility of the EFSA following suit will likely add competition among environmentally and ethically conscious consumers.

In addition to its carbon footprint, poultry farming contributes significantly to water pollution through improper waste management, nutrient runoff, and pathogen introduction. Runoff from poultry farms often contains harmful substances, such as nitrates, bacteria, viruses, and organic matter. This runoff can pollute rivers and streams, leading to degradation of water quality.

A major concern amongst poultry industry stakeholders is the lack of robust regulatory oversight in this area, particularly in developing regions. This lack of oversight enables offending farms to discharge waste into waterways without adequate treatment and heightens the risk of public health crises and environmental degradation.

Poultry production can also inadvertently lead to deforestation. While raising poultry does not directly cause deforestation, soybean cultivation is a major driver of deforestation and habitat loss. As the poultry industry heavily depends on soybeans for animal feed it indirectly plays a key role in this environmental destruction. In the UK alone, over three million tonnes of soy are imported annually from South America for chicken feed.

This demand has resulted in the clearing of vast areas of forests and savannahs in regions such as the Amazon, Gran Chaco, and Cerrado to cultivate soy. The lack of transparency in the global soy supply chain, coupled with weak enforcement of sustainability standards, exacerbates the issue, leaving many poultry growers, processors, and integrators unable to check that their feed supply is sourced from deforestation-free areas.

To help address these challenges, many poultry producers are actively implementing environmental initiatives that reduce their carbon footprint and improve their environmental stewardship. These initiatives typically include efforts to improve waste management and lower emissions. Composting and anaerobic digestion have proven particularly effective in this regard, reducing the level of poultry waste while also generating valuable byproducts (such as fertiliser and biogas).

Poultry farmers and integrators have also sought to improve water conservation by optimising water systems and equipment. Nipple waterers, rainwater harvesting, wastewater recycling, greywater treatment, and biofiltration are among the technologies being adopted to enhance water efficiency and reduce wastage.

It is also worth mentioning that although transparency remains a pertinent issue, more and more solutions are becoming available to actors within the supply chain. For instance, satellite monitoring systems, supply chain verification platforms, and blockchain technology can enable poultry producers to trace the origin of their feed supplies.

Rising feed costs

Feed costs represent a significant portion of poultry production expenses, typically accounting for between 65-75% of the total cost. The rising cost of conventional feed ingredients, such as maize and soybean, has placed immense pressure on poultry producers. Maize prices, for instance, surged by more than 30% over the last 5 months. This has had a cascading effect on the poultry industry, with SMEs left particularly exposed to market volatility, and many poultry producers being forced to reduce production or cease operations entirely.

In this new, more challenging environment, implementing effective feed cost mitigation strategies has become crucial for business survival. These strategies typically centre on improving feed efficiency, reducing waste, and exploring alternative feed ingredients while maintaining adequate nutrition and avoiding increased production times or worsened feed conversion ratios.

Labour shortages and workforce challenges

The poultry industry faces a growing labour shortage in both processing plants and on farms. This shortage is driven by factors such as an aging workforce, the physically demanding nature of the work, and competition from other sectors. The poultry processing industry also faces alarming turnover rates, with approximately 58% of workers quitting within 90 days and another 28% leaving between 90 and 180 days. The inability to maintain staff exacerbates turnover rates, creating a cycle that further strains the existing workforce and impacts productivity. Labour shortages can also compromise animal welfare due to inadequate staffing for essential tasks such as feeding, health monitoring, and disease prevention.

To mitigate these challenges, poultry producers need to improve their ability to attract and retain skilled workers. This can be helped by offering more competitive wages and benefits, as well as improved working conditions. Implementing automation and other technologies can also help by reducing the organisation’s reliance on manual labour and creating new, less physically demanding roles. Investing in training and development programs can also prove beneficial, both in terms of boosting productivity and helping to maintain high standards of animal welfare.

Rising demand for free range food and alternative proteins

Consumer preferences are evolving, with a growing segment of the population looking for free range, organic, and sustainably produced poultry products. It is also important to recognise that a significant portion of meat-eaters are incorporating alternative and plant-based protein options in their diets.

The free range and alternative protein markets are expanding rapidly, and this shift in consumer demand presents both challenges and opportunities for the poultry industry. While the global organic chicken market currently accounts for less than 1% of the overall poultry market, it is projected to grow at a CAGR of 13.8% from 2024 to 2030, double the pace of the overall poultry market. Stricter regulations around conventional poultry farming practices may accelerate this trend, and many larger poultry producers are responding by expanding their organic product lines and acquiring smaller organic farms.

Building resilience

The poultry industry stands at a crossroads and will need to adopt innovative and sustainable strategies to navigate the hurdles ahead. Poultry producers that proactively address the industry’s challenges, embrace new technologies, invest in workforce development, and implement environmentally sustainable practices will continue to thrive and meet the growing global demand for poultry products.

At Farrelly Mitchell, our experienced poultry consultants deliver practical guidance and strategic solutions across the poultry sector, enabling businesses to maximise growth potential and streamline their processes. With extensive experience spanning the entire poultry supply chain – from farm operations, processing, logistics, and retail – we help clients build sustainable competitive advantages. Contact us to discuss how our poultry expertise can help strengthen your business performance today.

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