Sales of free-range eggs in the third quarter of this year are 30% up on the same period last year, showing that the market is striking a cord with consumers.

But NFU president Peter Kendall warns retailers against taking the short-term approach of maintaining large margins at all costs.

Speaking at the recent British Free Range Egg Producers Association conference in Warwickshire, Mr Kendall said reports of falling organic egg sales were a real concern to the industry. But the third-quarter growth of free-range eggs sales showed that the free-range label was hitting home and delivering what consumers wanted.

“Because of the changes in stocking density (Lion eggs – Poultry World, November, p9), there is a potential to increase production and capitalise on this growth,” he said.

“Looking forward, the key factor is how we handle the removal of battery cages from 2012.

“One of the messages I continue to take to the government is the concern that we will achieve it by 2010, when other people around Europe will not be there by 2012.

Moving to other issues, he reported that the government was starting to get more interested in the food and farming industry.

“We have seen reports coming from government about the need for us to double food production by 2050,” said Mr Kendall.

He highlighted a cabinet office report earlier this year which talked about the dramatic declines in water availability ahead and warned that by 2050, half our arable land around the world would be unusable. “That is a real wake-up call.”

These papers were at the heart of government and food security was now back on the agenda, he added.

Mr Kendall said John Beddington, the government chief scientist adviser, who was appointed at the beginning of the year was one of the best advocates for the industry.

“We now have a chief scientific adviser who is telling the government at the core that we need to change and change our attitude to productive farming,” he said.

He spoke of a need for more regulation and a balance of trade between producers and the “strong, powerful retail sector”.

“I make a genuine appeal to the retail sector that we don’t have to go down that ghastly route of short-sightedness to try to maintain big margins.”

Mr Kendall said that although there were some good examples of retailer relationship, he had seen many examples of short-sighted retailer behaviour in the past few weeks. This would not allow producers to invest in their businesses for the long term, he added.

This message struck a cord with delegates, who showed their anger earlier at the conference over the recent free-range price cuts to producers. In an open forum, Noble Foods chief executive Peter Thornton (Poultry World, December, p4) partly blamed retailers for the downward pressure on prices.

He finished off by highlighting the importance of assurance schemes like the Lion egg and the strength of local and national brands.

“I am envious of what you have achieved and I hope that your success continues. This is a food for the future. Of course, there are many challenges ahead, but business has always been about managing change and I think your sector is well placed to do that,” said Mr Kendall.