Farmers attending the NFU Cymru Poultry Conference in Aberystwyth, Wales, have been warned about the over-supply of the egg market and the danger that conditions, which are robbing producers of their margins, may continue for some time.
“We are facing over-supply of eggs in the UK. There has been over-investment, which has left us as a packaging company with a very weak negotiating position with the major retailers,” Richard Kempsey, agricultural director at egg packer Stonegate, told farmers.
“Don’t underestimate the uncertainty and volatility of the egg market. The storm can and will undoubtedly continue. Wheat price increased by 78% in the last six months of 2010, and compound feed increased by 41%. Cost of production prices, in terms of feed and energy, remain extremely unsettled for the foreseeable future.”
Producers expressed concern over the number of planning applications for poultry units under consideration by local authorities while the glut in eggs continued.
Members asked packers to provide better forecasting on the position of the egg market to provide new investors, or existing producers wishing to expand, with more information in making a decision to enter the industry or expand their business.
“We must explore ways to build better security into contracts in an attempt to reduce the risk and volatility within the sector. Compared to just twelve months ago, producers are facing very difficult and different circumstances,” said Tony Burgess, NFU Cymru poultry board chairman.