02/03/2011 image expired

British egg producers say they are facing a crisis akin to the more widely publicised hardships faced by pork and dairy farmers; they are increasingly being squeezed between ever decreasing farmgate costs and rising fuel and feed prices.

Speaking at the fifth annual organic egg conference yesterday (1^st Mar), Robert Chapman of Farmlay Eggs, one of Scotland’s biggest producers, said the problem lay in the fact that the UK has 3million more laying hens than it needs.

Mr Chapman laid the blame on egg packers, who he claimed have a lot to answer for after directly compounding the over-supply situation by awarding contracts to new producers until fairly recently. Mr Chapman expressed his frustration at the packers’ actions, saying, “This is a totally irresponsible thing to do. Some producers are going to have to disappear if the market is to be corrected.”

In addition to stressors such as rocketing fuel and grain prices, there is a consensus among organic farmers that regulations set to come into force this year will make life even more difficult. Farmers at the conference admitted that new rules which stipulate feed is 100% organic as opposed to 95% will present a challenge.

UK producers lose £5 per bird

John Retson, who chairs the British Free Range Egg Producers Association (BFREPA), and who organised yesterday’s conference, revealed that he contacted supermarkets in February requesting a rise in the price paid to producers to offset costs. Talking in February, he said, "What we are saying to the retailers is that we realise that there are too many eggs, but the situation is so dire that if they do not protect their supply it is not going to be there. People are going to go out of production. We are pleading with the retailers to try to protect the supply."

Mr Retson has expressed concern that wheat prices in particular, at £170 a tonne, will not change. He described the invidious position in which egg farmers entered 2011, “we are still saddled with the worry of avian influenza and the worry of salmonella over and above these very high costs which are showing that producers are suffering more than £5 a bird net loss."

Supermarkets reduce farmgate prices despite increased sales

Nevertheless, despite a record 5% rise in sales in the final quarter of 2010, on 22^nd February Stonegate and Oakland, two of the UK’s largest egg packers announced a 5p per dozen drop in prices paid to farmers. The packers both blamed a massive surplus of eggs for the decision.

Farmers now receive 76p per dozen eggs, around half their retail price. One producer expressed anger at the developments, "It is outrageous that Supermarkets have increased their margins by 23 pence per dozen whilst packers have reduced the price paid to farmers by a further 5 pence. It is now time for the producers to show the public exactly what is happening in this industry and how the greed of the supermarkets and packers has brought this proud farming sector to near bankruptcy."