12th July 2021

Prepare for Ongoing Market Volatility

Prepare for Ongoing Market Volatility

Any poultry farmer with plans to build new poultry housing or refurbish existing ones should carefully look at the financials as Covid-19 and Brexit have impacted prices of raw materials.

Structural steel prices have doubled since last year with predictions that turbulent market conditions will continue through to 2022. Several factors have created these unprecedented market conditions, including increasing costs of raw material, lower levels of scrap and post-Brexit impacts on imports.

Availability of steel is not meeting demand and a shortage has led to many companies reserving stock but with quotas being applied, this does not meet the needs for future projects booked in for 2021 and beyond. Steel sheeting has almost doubled in price and shortages of fixings and ironmongery are commonplace.

Companies are having to revisit projects in terms of costings in light of the challenges they’re facing with market volatility. Another main component in any construction project is timber, which has doubled in price. Stocks were quickly used up as lockdown saw people embark on DIY projects in their homes and gardens, and more recently by the resumption of house building. The annual shutdown of European sawmills, due in early summer, will only compound the issue further.

As the UK continues to settle into its new relationship with the EU post-Brexit, there is a growing impact of delays in goods being imported from Europe. It is not just the larger items affected, smaller items that are not always considered to be a supply challenge are now an issue. Silicone supply for example is now restricted with allocations being made to repeat customers, far smaller than what’s required.

From the ground up, everything that goes into the build of poultry housing is being impacted. Groundworks and construction companies have been experiencing continuous price increases since summer 2020. They are also facing an ongoing challenge with availability of concrete which is being supplied on an allocation basis which impacts the delivery projects on time and within budgets.

Once a building is constructed the impact continues with the equipment supplied, many of which comes in from Europe or further afield. With container prices double what they were last year, this increase gets passed on to the end product. Feeders, drinker, fans, bulk feed bins are all affected by the market volatility and longer lead times.

Any proposed new builds which are at the planning stage are being advised to look closely at the financials, to ensure it’s viable expansion at this time. If you have a project planned, please get in touch so we can reserve stock at the best price. Call us on 01568 708819.