Crisis in egg sector deepens as more producers plan to quit
© AdobeStock The organisation representing British egg farmers is calling for a crisis summit with retailers at next month’s Pig and Poultry Fair, amid warnings of a mass exodus of producers from the industry unless egg prices increase.
A recent survey by the British Free-Range Egg Producers’ Association (Bfrepa) has shown that more than 70% of egg producers will leave the industry within a year if the price remains static.
More than half of the 139 farmers who responded said they were “seriously considering” not restocking at the end of their current flock cycle and pausing production until the price improves.
See also: Egg producers ‘on the brink’ as 30% cost rise wipes out profits
Although Morrisons and Iceland have instigated price increases in recent weeks – Morrisons by 10p/doz and Iceland by 25p/doz – it falls far short of the 40p/doz Bfrepa said is needed to keep free-range egg producers in business.
For organic producers, that increase needs to be about 80p/doz, the association said.
‘Cheap tactics’
Robert Gooch, Bfrepa chief executive, accused major egg buyers – including Tesco, Asda, Sainsbury’s, Aldi, Lidl, Marks and Spencer and Waitrose – of putting “cheap food marketing tactics” above the needs of the primary producer.
“Many of my members are losing money on every egg laid, and our data shows that even those who are making a small profit do not see a long-term future,” said Mr Gooch.
“The appetite for eggs from the public is extraordinary, but I’m afraid we will see shortages of British free-range and organic eggs on the shelves before long.”
Egg producers have been hit with significant cost of production hikes in the past six months – feed prices have soared by 50% and energy by 40%.
“There are clear and obvious cost increases being heaped upon farmers, and retailers simply aren’t sufficiently adjusting the retail price,” said Mr Gooch.
“Any increases being made are too little and too slow. They are suffocating businesses.”
The organisation has invited representatives from all the major supermarkets to attend an emergency meeting at the Pig and Poultry Fair on 10 May.
Case study: Country Fresh Eggs
Vale of Glamorgan egg producer Victoria Shervington-Jones sells about 60% of her eggs directly to customers and the remainder to Tesco.
She has increased the direct sales price of her Country Fresh Eggs by 10p/doz.
“Nobody batted an eyelid about that,” said Mrs Shervington-Jones, of Ty Mawr Farm, near Newport.
But there has been no price movement from Tesco.
Mrs Shervington-Jones has a flock of 39,500 hens and also produces eggs from another 20,000 hens she keeps on contract for another farmer.
She said she can only keep the business going at current price levels because she has no borrowings on her poultry sheds.
“My sheds are paid for, but if I was on my second or third flock and owed a lot of money to the bank, I just couldn’t do that.
“We have seen so much of the margin eroded from the industry in the past five years, we need to see a 50p/doz increase just to get back to where we were then.”