Noble Foods, the UK’s largest egg packer, is set to drop the price of eggs to all non-cage producers by 5p/doz from 1 February.
A company spokesman said the cuts would apply across all grades and affect barn, free-range and organic producers on contract to the company.
There are a number of reasons for the cuts, including a surplus of free-range eggs arising from last year’s increase in chick placements, especially in June, which are now hitting peak production.
This has added to the existing over-supply of colony eggs.
But the real pressure on prices has come from the supermarkets, responding to lower feed prices since last harvest.
Noble claims that, like most other packers, it has already given that cost reduction back to the supermarkets in the form of lower prices, but has delayed passing it on to producers for several months. But it is now having to recoup it from producers, too.
“It is very competitive out there and there is plenty of product available,” said the spokesman.
“It always seems that when feed prices rise, they are slow to react, but when it goes the other way they drop prices.”
Noble supplier Paul Hale
Other packers are expected to follow suit.
“Historically we always used to follow Deans, and now I guess we follow Noble,” said one Midlands packer. “Some deals are based on a fixed price for the life of the flock, and will not change. But those on flexible price contracts are likely to move soon.”
Noble supplier Paul Hale, who produces free-range eggs in Herefordshire, described the price cut as “annoying”. “We have had three years of very tight margins, though the past three months have actually been not that bad and we’ve got back some of the losses.
“Now we are back where we were. It always seems that when feed prices rise, they are slow to react, but when it goes the other way they drop prices. If it were not for the Christmas trade, they would probably have done this even sooner.”
See also: Read a full report on the egg market, check out February’s Poultry World .