Sharp rise in hen numbers trigger price fears

A sharp rise in free-range layer placings is raising concerns about the sustainability of current producer/packer egg prices, with supply in danger of exceeding demand.

Latest figures for July put layer placings at 4.07 million birds, the biggest monthly figure since current records began in 1993 and 37% more than in July 2014. The figures point to a UK laying flock of 34.6 million in December, compared with 32.8 million at the start of the year

Industry information suggests the growth is mostly in the free-range sector, with existing producers converting to multi-tier and new entrants coming in from other, more beleaguered sectors of farming, such as dairying and lamb production.

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Nowhere is this more acute than in Wales. The Royal Welsh Show in July was reportedly “awash” with farmers asking about free-range egg production, especially following the launch there of a new 40% grant scheme.

Adas consultant Marc Jones said his agency had already had a number of enquiries from farmers considering diversification into either broiler or egg production.

And Potters Poultry sales manager Dave Clegg said he was fielding enquiries “every day” from Welsh farmers faced with a cut in direct income aids and poor farmgate prices.

Roger Lewis, of Mid Wales Egg Packers, said the only people taking on more land in Wales were those who had diversified into chicken in the last 10 years, and farmers were looking over the fence at their poultry-farming neighbours with great interest.

Market impact

Despite the expansion, the British Egg Industry Council says demand for eggs has held up well this year, pointing to the growing UK population, the popularity of eggs among younger, health-conscious consumers and competitive pricing at retail.

But Robert Gooch, policy director at the British Free Range Egg Producers’ Association, said the expansion was “very concerning”.

“All the market data from Kantar and Nielsen suggest there has been a 7-8% increase in egg consumption year-on-year, but our own survey of members points to a 15% increase in production in the coming year. The implication is that we are over-cooking it.”

The NFU also pointed to pressure from retailers to reduce egg prices to better reflect lower input costs, including fuel and feed.