Egg price shock as production costs soar
SHOPPERS need to be paying 40p more at the till for their dozen free range eggs to help save farm businesses from collapse, industry leaders are warning.
Producers are being hit from all sides by huge hikes in energy and feed bills, says the British Free Range Egg Producers Association (BFREPA), as well as an increase in labour costs and raw materials.
A huge number of free range egg farmers are currently losing money on “every egg laid by one of their hens”, the organisation adds.
Some say they can last six months before they go bust, while others are on the brink now. Tom Pope, from Somerset, has only been in free range egg production for six months and says the situation is dire.
“The feed price alone increasing by £100 per tonne adds 20p to the cost of producing a dozen eggs on the farm, and every consumer will have heard about the energy price rises that are about to hit,” he explained. “For us, that means our energy bill will increase 200% on the current deal we have, leaving us with £40,000 to pay.”
According to the BFREPA, the cost of feed for egg laying birds is now £400 per tonne - up around 50% over the past two years - and is expected to rise even further with Russia and Ukraine being major exporters of the key raw materials used in the feed.
The egg industry is also seeing other supply chain costs increase including energy (+40%), transport (+30%) and packaging (+15%) significantly adding to the cost of production.
Mr Pope said his business needs an immediate price rise, in addition to keeping a tracker condition on the feed price which goes up and down with the market. “The alternative is having to go it alone and sell eggs on the wholesale market to survive, but that’s not what I want to do and not what the whole industry can do. The situation at present is desperate.”
Dean Summersby, who keeps 2,000 ducks and 10,000 quail near Lifton in Devon, mainly supplying Waitrose, has been producing eggs since 2008 but says the current situation is the “worst he’s ever seen”.
“Our feed price rose by £60 per tonne in the autumn, and is going up by another £30-40 from this week. It’s huge. If the egg prices stay the same, we’ll be out of business by June.”
Eggs are one of the cheapest protein sources on the planet, but the BFREPA says that farmers have been cut adrift by an “unrelenting squeeze” on their profit margins, which have now been completely eroded in many cases.
Robert Gooch, chief executive of the BFREPA, said it is vital that the money from a price increase in the shops makes its way down the supply chain to the farmers who need to save their businesses from financial ruin.
“For months we have been raising the desperate situation with all the major retailers, and they have all ignored the perilous position their farmer suppliers are in.”
Rebecca Tonks, founder and chief executive of St Ewe Free Range Eggs based near Truro, echoed Mr Gooch’s sentiments: “Our family has been poultry farming for well over 40 years and this is the most pressure we have ever experienced in the industry. The knock-on effect of not supporting farmers with price increases at this stage is laying farms will not be in a position to restock their poultry units, leaving the shelves empty of this daily, highly nutritious staple ... It could take years to get the egg numbers back to where we are today.”