Diversification options are currently onmany farmers’ minds in a bid
to strengthen their position in the build up to changes that Brexitmay
present to the agricultural industry. Instigating a newenterprise can
provide a vital alternative income stream, aswell as providing newand
interesting challenges that can reduce the risk associatedwith volatile
bemade, in particular to direct farming subsidies.
farming and hasmore recently provided a stable and profitable income
stream. On top of this the payback period (being in the region of 10
years), depending on production capabilities, has shown to be shorter
thanmany other investments.
Broiler and free-range egg unit investments have been favoured in recent
years. This has resulted inUK egg production rising from10 billion in
2015, to 10.3 billion in 2016, of which 50%are free range. This is however
set against UK consumptionof 12.6 billion eggs annually an increase of
2%on the previous year. With regards to broiler production in 2015, 930
millionbirdswere reared equating to 1.4million tonnes of meat. This
represents an increase of 3%on the previous year. UK consumption of
poultrymeat in the same year was 2.3million tonnes, with themajority
being chicken meat.
With a range of entry points into the poultry sector, fromself-managed,
joint ventures or rental options, the poultry sector gives farmers and
investors alike an opportunity to get involved.
If poultry is an enterprise of interest, or if you are looking to diversify
RURAL
NEWS
POULTRY DIVERSIFICATION
IS IT TIME FOR A REVIEW?
BROWN&CO | AUTUMN 2017
With the impending departure fromthe EuropeanUnion, uncertainty
over future trade deals, volatile currency and a likely changing subsidy
system, has there ever been amore important time to consider
reviewing your farming business?
The approaching changes and uncertaintieswill inevitably create
as many opportunities as issues or concerns for those involved in
the agricultural sector. However, with two years before significant
change, this surely creates a great opportunity to ensure your business
There is a full range of assessments that abusiness shouldmake, but
near the topof the list are themanagement capabilities. Only themost
capable, with a strategy for successionplanningto take care of the long
gamewill thrive. Which enterprises and the number of sectors the
business is involved inmay prove critical as ameans of spreading risk,
aswill the availability ofmanagement data and financial information,
key tohelpwithdecisionmaking. Also, the business structure, financial
ratios and the cost structure for each enterprisewill be critical in
maximisingoverall returns.
Making themost of each asset, whether that is land, buildings or
to restructure and potentially reinvest in other sectors, insome cases.
The challenges aheadmay seemdaunting to some, but exciting to
others and thiswill depend on your attitude and approach.
Whatiscertainisthattheprofitabilityofcertainfarmingsectorscannot,
ontheirown,standthepotentialvolatilitygoingforwardandthose
businesseswithoutavariedandstructuredapproachwillbemore
vulnerable ifnoactionistaken. Recentresearchundertakenindicatesthat
formostbusinessesthere isroomforimprovement.Allthatisrequiredis
anopenmind,flexibleapproachandabusinessplanforthefuture.
CHALLENGINGTIMES
CREATEOPPORTUNITIES
PROACTIVITY IS THEKEY
Talk to our specialist advisors to
helpmaximise your business potential