Free-range egg producers are growing increasingly frustrated at the lack of any price improvement – especially as wholesale values continue to climb on the back of tight supplies.
Addressing the NFU annual conference poultry breakout session, board chairman Charles Bourns said free-range producers faced a “desperate plight” and had been losing money “hand over fist” for 18 months.
They desperately needed a price increase, though there were some encouraging signs, he added. “Given the fall in chick placings, we should have a 5% decrease in egg production during 2012, which might mean that, at long last, free-range producers will start making some money.”
There had also been some growth in the demand for eggs, he added. But while the volume of retail sales had gone up 3.6% in 2011, the value had not kept pace.
These feelings were reiterated by BFREPA chairman, John Retson, who has written again to leading supermarkets, imploring them to increase returns to packers and producers.
“Feed prices are on the rise again and, with many existing free-range producers now at the end of their ability to beg or borrow the resources to continue in production, our predictions [that 12% of free-range producers would disappear by early 2012] are indeed coming true.”
Mr Retson said some retail egg orders had not be fulfilled recently, due to the number of colony birds dropping, coupled with the departure of free-range egg producers.
“Unless the price for eggs paid to free-range egg farmers increases immediately and significantly, it is a sad fact that British consumers will go short of British free-range eggs.”
The lacklustre producer prices are in contrast to the firm wholesale trade, which started to climb last summer and has accelerated upwards in recent weeks.
There have also been some indications of retail price rises. Figures collected by Poultry World show that large free-range eggs have climbed from £2.98/doz in December to £3.36/doz in February, while mediums are now averaging £2.69/doz, up from £2.60/doz.
But packers are adamant that none of this has been passed back to them. “Retail prices do move about a lot. The key issue is if we get anything back, and we’ve not seen anything yet,” said Noble Foods director Andrew Jorêt.
“There is definitely a shortage of cage egg, but for free-range there is still a bit of a surplus,” he added. “Wholesale is very strong and at some stage that should feed through to retail, which may trigger an increase for producers. The trouble is, we don’t know at what stage and that is a major concern.”