Free-range egg farmers face numerous challenges to their market beyond their farmgate, whether brought about by Britain’s impending exit from the EU or issues closer to home.
They include the risk of tariff-free imports, continued expansion in the sector suppressing prices and the need, in the view of British Free Range Egg Producers’ Association (Bfrepa), for more even contracts between egg farmers and their packers.
Bfrepa chairman James Baxter outlines how the group is working for members.
1. Import tariffs set at zero in the case of a no-deal Brexit
British free-range egg businesses stand to lose more than most from new trading conditions with the rest of the world post Brexit.
Many agricultural sectors will be protected in a no-deal scenario by the continuation of import tariffs on those exporting products to the UK, but eggs have not made the list in the event of a no-deal Brexit.
Why? It would appear that the government wants cheap food, and eggs have been sacrificed. This is a huge risk.
The standards of production in the UK are extremely high and that comes at a cost, which makes our product more expensive.
We will be massively exposed if our customers can buy unlimited quantities of cheap eggs that aren’t comparable to ours.
It is important to remember that UK free-range eggs are unsupported by EU subsidies. We must have a level playing field.
All eggs imported into the UK must be produced to the same standards we have here or have tariffs imposed on them.
2. Expanding free-range numbers
It has been over three years since we first warned about the impact of over-expansion in the free-range egg market.
And while the price farmers receive for their eggs continues to fall, we will continue to point out one of the principle causes.
In the UK, we now have capacity for more than 26 million free-range hens, and our planning application data shows there are more sheds in the pipeline.
That’s an increase of about four million hens in the past two years, at a time when the egg price has continued on a downward trajectory.
The latest Defra data (to the end of Q2 2019) shows the average at the farmgate is 80p/dozen.
Over the past four years, the price has eroded by about 5p/dozen.
During this time, numerous producers and packers have gone under, leaving a trail of debt and issues behind them.
We are not anti-expansion, but the growth we have seen is unsustainable, and producers – both new entrants and expanding businesses – need to be in full possession of the facts before investing.
3. Contracts between farmers and producers
Packers need to take their fair share of responsibility for the market situation.
Work carried out over the past year in conjunction with specialist contract lawyers has shown there is a gross imbalance in the agreements between producers and packers, and it is, unsurprisingly, the producer who is exposed to the most risk.
We know of examples of producers who have invested in sheds without the guarantee of the price they will be paid or knowledge of how long they will have a buyer for.
Our vision is for all free-range egg businesses to have fair, meaningful contracts that guarantee a supply of high-quality, free-range eggs to consumers at a sustainable price for producers.
Our aim is to have the model contract produced by the end of the year as the basis for agreements between producers and packers.
4. The transition to cage-free
We are still not entirely clear on how the Cage-Free 2025 commitments from the UK’s major retailers and food service companies will play out.
From members’ points of view, we want barn eggs to be a success and for the product to replace much of the gap left by the move away from colony production.
The capacity for barn production has increased, but many will be waiting for clarifications from the Lion scheme on exactly what the production standards will be.
There must be a point of difference between barn and free-range so consumers can make a clear choice over which eggs they want to buy.
Eggs are a staple of British diets because they are tasty and nutritious, but also because they are affordable.
Consumers should have a budget egg on the shelf, as well as the option to buy free-range and organic.
For this to be effective, there needs to be clear lines drawn between different production systems.
We are getting towards the time of year when the threat of bird flu is at the forefront of our minds.
We have been fortunate not to see any widespread outbreaks in the past few years – we know that deadly strains have been in the UK, but they have not broken down our biosecurity defences yet.
Producers and packers must continue to be on the front foot with all biosecurity protocols, whether that’s infectious animal diseases or issues such as salmonella.
Our sector has built a strong reputation for looking after its hens and providing the public with safe food. As we look to the future, it is going to be even more important to maintain that reputation.