Egg and poultry-meat producers are both facing the threat of feed price instability that could slash their profits. Feed in the poultry sector accounts for between 60 and 70 per cent of production costs. Profits have been boosted by the collapse in feed prices that peaked at about £310 per tonne in 2013, but now stand at £225. It is that hefty decline in feed prices that has allowed producers to withstand the deflationary background on selling prices and intense competition between retailers.

The price of eggs are being driven down by supermarkets in their price wars, in much the same way as with milk. The level of deflation witnessed in the egg sector over the last two years is staggering. A six-pack of free range eggs typically sold for £1.40 two years ago, while today the headline price is 79p. The average UK farm-gate egg price through the first quarter of 2016 was 72.6p per dozen, a 10 per cent decrease on the fourth quarter of 2015 and a 13 per cent decrease on the same quarter in 2015.

The total value of the British egg market has declined from £900m annually to £786m and is still falling, while volume has grown at an unprecedented rate. Last year, annual consumption grew by six eggs per capita to 189. While volume growth is great, the industry is bleeding value mainly as a result of retailers fighting ever harder to create shopper loyalty by strategically sacrificing eggs.

Realising a price increase will require the supply tap to be turned off - something much harder to achieve given the number of new units with heavy borrowing tied to them, compared with five years ago. While the supply of eggs is currently fairly tight, there are reports of more laying birds in the pipeline that could lead to oversupply.

The real worry is that feed prices increase and producers find it almost impossible to recover that increased cost from the highly competitive marketplace. The price of soy bean meal has already risen by £60/tonne in the last couple of months, and it's inevitable that wheat prices will eventually recover.

Whether through new product development or economic factors affecting food spend, poultry-meat consumption is also on the rise. In 2004, 805.8m birds were slaughtered in the UK, compared to 900.4m in 2014 - a staggering 1.384m tonnes.

Like the egg sector, the chicken market is also suffering from deflation with value up just 0.6 per cent, but volume up 4.6 per cent in the past year.

Poultry appeals across the national cuisine and is not banned by any religion. Annual poultry consumption has risen from 30.5kg per person in 2000 to 33.1kg in 2014. More worrying for red-meat producers is the fact that poultry consumption as a proportion of all meat consumed has risen from 38.5 per cent to 41.4 per cent in the same period.

The poultry-meat sector is dominated by four major processors which slaughter about 85 per cent of the UK's birds, and farmers are generally either integrated producers or independents.

Integrated farmers are provided with chicks and are usually paid a flat production rate with performance bonuses. In other words, they are farming on their own farm, but managing the birds for processors. While there are questions in the industry as to whether farming on an integrated system stops producers benefiting from peaks in demand, it means they are able to keep a stable, profitable price.

Independent producers, on the other hand, are more open to the mercy of the market, but can take greater control over costs.

Scottish poultry production is considered to be more expensive than south of the border due to increased feed, energy and transport costs.

In 2013 there were 20 broiler producers in Scotland, but at the end of 2013/early 2014 this was reduced to only 12, and they have been forced to reduce their production levels.

Things have now stabilised in Scotland, but investment is needed in processing facilities - ideally a cutting plant - to allow numbers to increase again. Currently, without a cutting plant, carcases have to travel to Birmingham to be cut and deboned before returning to Scotland.

Although the future is volatile, broiler production is an attractive sector where you can grow seven or eight crops of chickens per year, so cash-flow is good. It's just a pity Scottish farmers can't readily participate due to lack of processing facilities.