The production of chicken could be slashed almost in half if the planned reduction in processing at the 2 Sisters factory in Coupar Angus is carried out.
Earlier this week the company, which only bought the factory last year from Vion, announced it was considering reducing throughput at this, the main poultry processing plant in Scotland.
It is believed weekly throughput will drop from around 800,000 chickens per week to just over 400,000
Mark Ogg, of Arnhall, Edzell, is one of a group of broiler chicken producers who were told this week by 2 Sisters that their contracts to supply birds would be torn up after the next two batches of birds have been produced.
He found this news given to the producers galling.
“Encouraged by two of the country’s top supermarkets whom the processors have been supplying, we have spent millions of pounds in recent years upgrading our units to the highest standards.
“Now we are being cut loose with no other buyer in the market. We will see processed chicken coming up from England and sitting on the supermarket shelves while our production sheds lie empty. The company has stated they will only take chicken in from the units they own. We are being left high and dry.”
Making matters worse was the announcement that prices for the final two batches of chicken will be cut to a point where he reckons it is hardly worthwhile to fill the units.
The liveweight price of chicken is currently around 90 ppk.
Other producers are in a similar position having individually spent hundreds of thousands of pounds, if not millions, on new broiler sheds and improvements to older buildings.
These have included more energy-efficient heating systems and the installation of low-level windows.
Many of these improvements were made at the behest of supermarket customers keen to boast of higher welfare standards.
It is especially galling for the producers to then be told they face mothballing their units while lower-priced imports fill the gap.
There is Scottish Government money at stake, too, with many of the improvements and new-builds supported by grant money from the Scottish Rural Development Programme.
The loss of so much poultry production will also have an effect on arable farmers and the feed industry. A quick calculation shows that the loss of 400,000 chickens per week of throughput means 1,600 tonnes per week less feed is required by the Scottish poultry industry. Much of this is wheat.
NFU Scotland president Nigel Miller said: “We have been catching up with members who are involved in the supply of the 2 Sisters plants.
“The immediate issue with the plants themselves looks like there could be significant job losses at the one plant, which is obviously really difficult at this time of the year.
“I know it is a real blow to the poultry industry, and we have got indications that some of the direct contract suppliers will be served notice within the next 24 hours, with others awaiting the outcome of the review.
“These farms may be without any contract work or processor at all in two or three months’ time. It is a pretty hard place to be.
“We have real concerns that there has been a change in the poultry market, and we will be working to identify that,” he said.
“We will be trying to identify the real reason that all of a sudden we need less poultry processed in Scotland in order for us to push volumes up again.
“NFU Scotland and the Scottish Government will now look at the impact on the agricultural sector as a whole, as well as trying to identify the difficulties being faced in the Scottish market as to how supply can be secured going forward.
“We will also be speaking to supermarkets to get them to play a role in helping secure a future for the poultry industry in Scotland.”
Rural Affairs Secretary Richard Lochhead said: “Following discussions today with NFUS and one of the poultry producers affected, I have asked for a small group of key stakeholders to be set up to look at the immediate and wider implications for Scotland’s poultry sector, and the various ancillary businesses that support the sector.
“This is an uncertain and deeply worrying time for the small number of independent producers involved, and it is important we do as much as we can to ensure any impact is minimal.
“I will be having further discussions with both industry and retailers in the days to come.”
Producers themselves are now suggesting they may have to take cooperative action to secure new outlets for their poultry.
The alternative of leaving expensive specialist buildings unused is obviously very unpalatable.