A study, entitled 'A Sustainable Future for British Chicken', has shown that periods of steady loss from 2004-2008 led to little investment in the broiler sector, particularly for new chicken housing. It found that input costs have risen dramatically during the last five years, but margins have failed to keep pace.
NFU poultry board chairman Charles Bourns said: "We saw a need for this report to hammer home the real situation facing our British poultry producers. Despite having a will to reinvest in this sector, British chicken producers are lacking the means.
"Costs for investing in new poultry sites for example have more than doubled in the past 10 years, but this is what we need to do to ensure a vibrant sector in the future."
Figures from the report, written by Savills, also showed a breakdown of the retail price for chicken in 2008, with producers receiving just a quarter of available margin, compared to the retailer share of around 50%.
The document called for a benchmarking of production costs, the introduction of an independent costing service and reduction of waste and inefficiencies in the supply chain.
Ashley Lilley, Savills agribusiness consultant, said: "We must avoid a repeat of events in the pig and dairy sectors, where many farmers are leaving the industry each year.
"Only by working together throughout the whole supply chain, incorporating longer-term equitable contracts, will we achieve the long-term confidence and much-needed investment in British chicken."