Disposal of spent hens: options evaluation

Summary Conclusions

11. The Summary Conclusions are drawn from the industry consultation, literature review and financial analysis of various processing options and scenarios. Four options and five scenarios for a new abattoir and/or processing facility have been considered with capital costs estimated as follows (Detailed breakdown in Appendix 3):

Options and Capital Costs

Option 1

Abattoir and processing with carcasses sent for petfood

£7.13m

Option 2

Abattoir with protein and oil extraction capacity targeting the petfood and aviation fuel markets

£12.56m

Option 3

Abattoir with carcasses sent for incineration

£7.5m

Option 4

Abattoir with butchery and further processing targeting processing and ethnic markets and exports

£9.23m

12. The five scenarios which are explored later in the report are based on the volume of birds available. The research findings indicated that the 4.8m spent hens procured annually from Scotland are not sufficient to sustain a viable standalone processing facility. The minimum required is around 8.5m birds per annum.

Stakeholder feedback and the RSPCA standard

13. The industry has a functioning system of managing spent hen disposal which adheres to the current RSPCA standards which permit an 8 hour journey time. At the time of report production, The RSPCA has stated it has no imminent plans to shorten journey time allowances and provides exceptions for those businesses which can find it challenging to meet this requirement. If this situation were to change and journey times were shortened, the ability of the sector to comply would be curtailed. Other parts of the United Kingdom would be similarly affected, e.g., Southwest England.

14. One method used to monitor the welfare of spent hens travelling to slaughter is to measure the level of ‘Dead on Arrival’ birds (DOAs). If the level of DOAs exceed 0.5% there requires to be an investigation to identify why the level has been breached. Industry feedback suggests the frequency of DOAs breaching the 0.5% limit is low but unquantified and in individual cases, often, no single causational factor can be identified. The project could find no single source of pooled data related to this measure. Data on DOAs is shared with the supplying farms who in turn supply the data to retailers on a regular basis.

15. While the system of spent hen disposal delivers against the needs of the sector, it is highly reliant on the continued functioning of two facilities, one located in Bradford and the other in Gainsborough. Any fundamental disruption (e.g. fire, major breakdown, etc.) to the workings of these businesses would have a significant impact on the industry. The research found no reported concerns about the viability of the abattoirs. Nevertheless, a scenario planning exercise may help identify potential solutions should a crisis occur.

16. Alternative options for more local spent hen processing are not a priority for egg producers and this scenario is not likely to change unless journey times are reduced or there is a major problem with one of the spent hen abattoirs. The focus of the egg producers and their investment is concentrated on their individual businesses. If circumstances change and local spent hen processing capacity becomes a requirement, then a highly detailed feasibility study will be necessary to help farmers to thoroughly evaluate their options.

17. RSPCA accreditation is valued by many stakeholders in the supply chain, and it provides an independent third party verification of good practice. The RSPCA appears to be understanding of the practical implications of attaining their standards and encourages stakeholders to engage with the organisation. Maintaining active communication between egg producers and the RSPCA should be encouraged, particularly where new standards are introduced that may incur significant costs to producers. In such circumstances, everyone needs to be aware of the true costs and benefits.

Welfare research

18. The literature review identified a lack of relevant academic research on spent hens linked to transport welfare. All the available research was focused on broilers. This identified various practices which impact on broiler welfare encompassing:

• The quality of sheds, rearing practice, and the health of livestock prior to transport
• The timing of the withdrawal of feed and water
• The timing and discipline of catching and crating
• The length of travel time and the travel environment
• The length of lairage resting time prior to slaughter

19. No single practice was identified as having the most significant impact on bird welfare. There were also contradictory findings on travel time which identified that birds were more stressed on shorter journey times where they did not become used to their new environment prior to unloading. This challenge could be managed by allowing the birds more resting time at the lairage. Only specific research focused on spent hens will identify how relevant broiler research is and how current practices impact on bird welfare linked to practices which might be improved. This should be considered as a priority by the sector to determine if methods can be further enhanced.

Financial viability, capital and structures

20. The overriding finding from the financial feasibility evaluation is the highly marginal nature of spent hen processing. To make it successful, scale is required and that points towards an approach which procures hens from Scotland, Northern Ireland and the North of England. A minimum volume of around 8.5m birds per annum is required, which is significantly more than the 4.8m spent hens procured annually from Scotland. There are existing businesses in this sector already operating at this scale. They will be incentivised to disrupt a new player entering the market adding to the risk of establishing a successful operation.

21. An alternative option could be to seek a partner based in Scotland with the capacity and desire to undertake this type of project alongside existing operations. This would likely be a broiler abattoir/processor either as an existing business or potentially, as a new investor. It is likely only feasible as a broiler and spent hen combined processing plant given the volumes required. Currently, no UK based abattoirs appear to mix broiler and spent hen processing, but it was a practice which took place in the past, including in Scotland. Dialogue with existing and potential investors could establish if they have interest in this type of processing opportunity.

22. When/if a viable processing option had been identified its sources of funding and capital structure can be identified. Sources of capital include:

• Private sector investment
• Bank lending
• Government grants

23. Potential structures include:

• A private limited company with possibly individual shareholders drawn from a spent hen processing enterprise, egg producing farmers and possibly other external investors
• A contractual venture where a spent hen processor invests with the backing of a guaranteed throughput from egg producing farmers
• A joint venture company, but with ownership from a processing business alongside egg producing farmers investing in a single block via a new co-op established for that purpose

24. Unless there is more justification for shorter journey times backed by credible research, it is likely the sector will continue to use the abattoirs at Bradford and Gainsborough. Given the competitive nature of the sector this is a rational strategy. Further consultation should only take place if the situation changes. Such a scenario would require a whole industry response and should not progress without full consultation.