Organic egg producers are struggling to make a decent profit, despite the healthy expansion of other parts of the egg market.
Chris Tarran owns and operates a small scale organic egg farm at Bedal in North Yorkshire and has seen prices for his eggs collapse over the last 12 months as demand has fallen.
“The organic market has been bad and is dropping. Prices for us have dropped about 14p in the last 12 months, which represents 9% of revenue. To a company which is highly geared that is an issue,” Mr Tarran told Poultry World at this week’s Pig and Poultry Fair at Stoneleigh.
Along with his wife Diana, Mr Tarran has invested about £400,000 into equipment to set up the farm, only finishing the process when the recession undercut sales and prices.
“We’ve got this massive expansion project we’ve just come to an end of. We’ve pumped all the money in and now there is no return,” Mr Tarran said.
“We have to have a strategy that gets us through this and gives us a view of where we want to be, but we haven’t had that.
“Our packer has told us he doesn’t see any movement in the organic egg market for three years.”
And there wasn’t any positive news from Sainsburys buyer David Whiffen, who told “Challenges and opportunities” forum at Stoneleigh prices were still falling.
“I haven’t seen the bottom of the market; it’s still declining year-on-year and week-on week,” Mr Whiffen said.
Speaking to Poultry World after the forum, Mr Whiffen said Sainsbury’s would continue to support organic farmers, but he was still cautious about the industry’s future.
“Sainsbury’s will always sell organic chicken and eggs. It is very important to a large sector of our customers. It is our most loyal customers who buy organic,” he said.
“At some point it will reach the bottom, and I hope that is in the next year, but I don’t want to give people false hope.”
Mr Tarren said the he is hopeful the industry will recover and there will be a market for his eggs, but he believes producers should be pragmatic and be ready to move as the market dictates.
“It’s just a business. OK it’s a nice lifestyle and we particularly like it, but at the end of the day you’ve got to earn money,” he said.
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