A Pembrokeshire-based poultry producer is offering farmers the chance to increase their income by growing free-range chickens on its behalf.

Capestone Organic Poultry, one of Wales’ biggest poultry businesses, has already recruited 10 farmers to help meet the rising demand for its cornfed chickens.

It is now seeking to outsource rearing to a further 10 farmers, a diversification opportunity which it says will generate those farmers an income in excess of £52,000 a year.

Farm businesses would need to commit one hectare (ha) of land to allow the birds to range and invest approximately £250,000 in a free range fixed housing unit but the project offers a five-year contract with a 15 per cent return on investment, says Viran Abeysena, a member of Capestone’s agricultural team.

“On a relatively small acreage of land, farmers can create a diverse, profitable enterprise that would add a significant amount to their bottom line in a sector of the market that is growing,’’ he says.

Outsourcing poultry production is commonplace in some regions, in particular northern Ireland and south-west England.

The model provides farmers with additional income while allowing poultry businesses to expand without acquiring more land. It also represents a source of income that is not influenced by reductions in the single farm payment.

Capestone is run by fifth generation farmer Justin Scale on his family’s 365ha farm at Walwyn’s Castle.

Until 1997, Mr Scale had focussed his farming operation on arable production while also producing a small number of Christmas turkeys, a business the family had been involved in since the 1920s.

After a series of poor harvests, he gave up crop production to develop the poultry side of the business.

Growth has been phenomenal. From supplying a local store with 50 chickens weekly, it now processes 50,000 free range organic and cornfed poultry a week.

With that rising demand comes a need for additional capacity.

The business currently uses a mobile system to rear organic poultry at Walwyn’s Castle but wants to outsource some of its free range operations into purpose built fixed poultry housing.

“This is an ideal opportunity for a farm diversification the requires minimal labour and good returns,’’ says Mr Abeysena.

To meet welfare regulations on transport, partner farms must be within a three-hour journey time from Capestone and there is also a requirement for the farm to have suitable access for articulated lorries.

Joe Rimmer, a member of Capestone’s agricultural team, said the opportunity would be ideal suited to a beef and sheep farm – 70 per cent of the farms it currently works with are in that sector.

“They tell us that the one hectare where they have developed the poultry enterprise is the most profitable hectare on the farm,’’ he says.

The business model has worked so well that some of the growers have already built a second shed and others are applying for planning permission for their third.

“The more sheds they have, the lower their fixed costs,’’ says Mr Rimmer.

The UK free range market has a weekly demand for 500,000 chickens and Capestone currently produces a small percentage of those.

“The potential for growth is huge’’ says Mr Abeysena. “A combination of Brexit, the pandemic and an increasing concern about how food is produced means there is a big demand for free range.’’

Capestone, which employs 200 full time staff at its Walwyn’s Castle site, is a major supplier to businesses such as M&S and recently featured in the company’s television advertisement campaign highlighting the British provenance of its chicken.