Planning consultants share their views on egg supply

Published on : 3 Feb 2023

Specialist agricultural and rural planning consultants, Ian Pick Associates have seen a drastic decline in the number of planning applications received. Ian Pick advised that “At the start of this year, I have seen the lowest number of applications for free-range egg housing than I have seen during 17 years of being in this business”.

“From what we might call its peak in 2010, where we were getting up to 50 applications at any one time, by contrast, we currently only have 2 live applications going through and one enquiry. Of these one has a few technical issues, but we expect that to be finalised in the next few weeks. The other is a long-standing application in Leicestershire, for which we are making progress”.

Ian puts this down to the fact that egg production is “just not making the margins required. Simply put, as we all know, supermarkets are paying less than the cost of production. We have seen many farmers get their fingers burned”.

He noted that the other aspects that are seriously curtailing applications, is the cost of building, “which has all but doubled”. “Brexit, the war in Ukraine and inflation have led to phenomenal increases” he added. “Hefty increases in the cost of steel, wood, equipment and concrete have huge impacts on build costs. Whereas say a year ago he cost to build a 32k poultry shed would be around £1.2 million for example, that is now more like £1.8 million now”.

The other factor is the cost of borrowing. Rates have gone from around 2% to 5%.

“The margins are not there. Unfortunately, these issues are not unique to the poultry sector either. We have seen a lack of expansion in livestock housing applications too. They have gone down massively, especially pig housing. Pig farms are disappearing.

We have seen a few applications in the broiler sector, but not many. Many farmers are restructuring, repurposing buildings for grain storage, or even housing.

We have also seen a few unimplemented consents, where permission has been granted, but not progressed. They have 3 years from consent to start any builds.
I do not see much confidence in the free-range sector at the moment. Even if there was a big upturn and more farmers wanted to expand, there are a few limiting factors and hoops they have to go through which can be a further barrier to entry”.

Natural England legislation
In March 2022, Natural England issued guidance to local planning authorities concerning nutrient neutrality and its role in preventing further adverse impacts on protected wetland habitats as a result of nutrient enrichment.

Ian explained “Once upon a time, we’d expect perhaps 2-5% objections to a applications, now however it has completely turned on its head and is more like only 2% avoid such scrutiny. We are getting 99% objections to applications”. He feels that the new rules and regulations imposed are “impossible to comply with”.

“Ammonia production is the inevitable consequence of food production. It is now labelled as a pollutant under the Natural England scheme. This has further been compounded by their nutrient mitigation scheme launched in November 2022. The threshold levels set are very difficult for a free-range unit to meet”.

He also points to regionalisation, with some parts of the country worse than others in terms of the effectiveness of objectors and the attitudes of planning committees.

Despite all this, Mr Pick points out that 70% of applications do go through eventually.

Planning consent harder to obtain
These sentiments were echoed by management at Parker Planning. “On average we’re finding the average turnaround time for such projects can be between 6 months to over a year – so we anticipate the decisions on a handful of these projects in the coming weeks and months.

Securing planning permission for new poultry sheds is an increasing challenge, with objectors becoming more sophisticated and planning committees more hard-nosed.

Check for things like landscape impacts, whether the Environment Agency and the Highways Agency are likely to be happy and what the effects on neighbours might be.”

“Most applications for layer or broiler expansions will also need an Environmental Impact Assessment – a statutory requirement for any unit with over 85,000 birds. This involves detailed assessments of noise, odour, ammonia, ecology, transport, drainage, flood risk and landscape impact”.

Turbulent times
Oliver Grundy at JHG Planning Consultancy Ltd who principally operate within the East Midlands region, told the Ranger that “we have seen a drop off on applications over the last year. Clients who previously saw steady growth and expansion, have certainly taken a clobbering from the impact of avian influenza, plus the war in Ukraine, inflation, feed cost increases, building cost increases and the hike in interest rates. We are living in turbulent times. Many of our clients have moved into a more defensive strategy just to try and keep their business going. We have had no free-range development applications for probably a year now”.

Blocks on development
“We are seeing an increase in regulatory requirements year on year. Councils often default to triggering a request for an Environment Impact assessment in circumstances where such is perhaps not strictly necessary or appropriate. In some areas development is nigh on impossible. Wales for example has some very stringent local authorities and is basically a non-starter for livestock unit applications. The Welsh government have somewhat hamstrung the rural economy”.

Getting planning can be an “onerous task, costing anywhere between £10-£20,000 for a medium sized application, to get it to a stage where permission is granted. Local authority planning administration fees for large agricultural buildings are a significant cost. Some authorities also charge a community infrastructure levy (tax) on agricultural buildings. Environmental impact assessments are increasingly requested for smaller scale expansion of existing poultry farms due to concerns over cumulative impact, making it a bureaucratic minefield”.

JHG Planning Consultancy Ltd emphasise the importance of carefully appraising the environmental and policy compatibility of a poultry farm project right at the outset. “I work with specialists such as AS Modelling & Data Ltd, founded by the former head of ADAS. They undertake air quality assessments, examining potential odour and ammonia emission concentration plus modelling of nitrogen deposition. It is often very helpful to obtain this data at project inception because the potential
for objections from statutory consultees such as the Environment Agency and Natural England can then be avoided through changes to siting, operational attributes or other mitigating measures.

For less complicated applications, I usually undertake landscape and visual impact assessments, heritage statements and flood risk assessments in-house. Fully understanding the potential breadth of constraints and objections is key to minimising risk exposure and smoothly navigating planning applications for livestock units through the growing minefield of bureaucracy and local politics.”

Move to sustainable energy generation
“What we are seeing currently are applications for ancillary renewable energy and biomass boiler set-ups, as farmers frantically try and reduce their energy costs.

So where will our eggs be becoming from?
That is a very good question. Not surprisingly given the current economic climate, we are seeing a reluctance by
farmers to expand, and very few new entrants in the free-range sector at the moment. It’s a leapfrog economy, with
many smaller farmers who saw free-range as a good way to diversify a few years ago, now being squeezed out of the equation.

Maybe imports will be a stop gap? I expect prices will be forced to go up given eggs are an important part of consumers diets in the UK and the demand is there. People want eggs and the move is towards barn or Free-range. Farmers need to be incentivised to take a chance again”.

Jason Powell at Powell & Co, admits that the poultry shed build volume has dropped by around 20% but they are able to prop up their business with other agricultural developments such as dairy and solar power plant requirements. “Our business
is multi-skilled so we are able to keep going and just redirect our expertise”

Unchartered territory
Tom Simpson, Managing Director of Potters Poultry is also cautiously optimistic “As an industry, there have often been ups and downs but we have always got through in the past. Times are tough at the moment, with AI, high-interest rates, and inflation, it’s the perfect storm.

Lots of building development has been put on hold with a drastic decline in enquiries for new builds. “it’s as flat as it’s ever been, probably even halved year on year. But we have redirected our focus on upgrading existing units to improve productivity.”

Any available funds are being redirected to restocking birds lost to AI or improving existing buildings to try and increase efficiency and reduce input costs. “With building costs and interest rates so high, the numbers just don’t stack up for new buildings. Those with existing operations are struggling to survive”.

Even if interest rates settle, there is a time lag to getting projects through planning. “We can’t just switch things on overnight. The lead time on planning applications is anywhere between 4-12 months, with 6 months being the average time frame.

But that said, we are seeing producers starting to restock and demand for pullets is increasing”.

Staying positive
The market leader in supplying clear span steel framed poultry buildings, Morspan have been in this business for over 25 years. Morspans’ Sales Director, Donald Gillespie is more positive about future developments.

“We design and build units from 6,000 up to 80,000 birds with 32,000 and 64,000 being the most common. Certainly 2022 was a quieter year for us but for this year our order book is not too bad, and it is going to keep us relatively busy. We are looking at a mix of new units, expansion to existing premises and also some packer’s units, including several in Scotland. We are working from as far south as Kent and Devon, to the far north in Aberdeenshire. The North half of the country is a lot busier than the south and obtaining planning seems to get easier the further north you go.”

Donald notes that “producers farm for the next generation, not just a ten-year plan. It will hopefully all come good again. Certainly whilst 2022 was quiet, this year is looking more promising, even though the planning situation within Great Britain can be frustrating. “it’s a bit of a postcode lottery as to whether plans are approved”

Pullet rearing is busy again, and whilst supply is tight, if prices can reflect the true cost of production, things should turn around, so we shall wait and see”.