Fears over egg sector expansion

The free-range egg sector is becoming increasingly concerned at the rate at which potential production is expanding, with chick placings on the increase, demand for pullets rising and new businesses coming on stream.

“It’s very scary,” said Steve Carlyle of Country Fresh Pullets. “Before the egg price increase, everyone was suicidal, but as soon as the market turned, the phones lit up. People who were going to give up reinstated their orders. People with planning permission for sheds are now getting them built.

“In the main, it’s free range – new entrants as well as people wanting to expand. But we’re also seeing new colony egg producers, some with quite significant numbers. Also, as free-range producers have left the big packers, so the packers have gone out to replace them.”

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While good for business in the short term, Mr Carlyle was worried what it would mean for egg prices further down the line. “In 18 months time we’re not going to have another cage ban to pull us out of the mire,” he said.

Official figures from DEFRA confirm the upswing. Commercial layer chick placings in March came to 2.5 million, which was up 320,000 on the same month last year. This followed a 290,000 increase in February. Egg settings in March were a massive 1.68 million up on March 2011 at 8.79 million.

   Layer chick placings
 2011  2012 % change
Jan 3.45 3.01 -12.8
Feb 2.52 2.81 11.8
Mar 2.18 2.50 14.7
Q1 8.15 8.33 2.1

BFREPA chairman John Retson said there were several factors driving the expansion, in addition to the improved producer egg price.

Some people were looking to expand to improve efficiency, while others were going into free-range having come out of cage egg production. Also, the fall in organic sales meant people were switching to free range, enabling them to stock at nine birds/sq m, rather than six birds/sq m. Packers had also been calling for more eggs.

“This expansion is into what is already an oversupplied (free-range) market. There are some very na├»ve people out there,” he told Poultry World. “By next year we could be looking at a very weak market.”

Peter Humphrey of Humphrey Pullets said some hatcheries were now sold out of chicks for the summer. “People that could not justify putting in enriched cages last year are now putting in new colony units. We are also seeing some new free-range sheds going up. We’ve got to have restraint, as there is no point in this boom and bust.”

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