Free range egg producers are calling for an immediate increase in the price they receive for their eggs as the cost of feed continues to rise.
Dry weather has caused poor crop yields across Europe’s major wheat-growing countries and the knock-on effect is being felt by egg producers with some reporting a 50% increase in feed costs.
With many producers paying about £270/t of feed, a medium-sized producer is spending £40,000 more per flock than at the start of the year.
‘Unsustainable’
Robert Gooch, chief executive of the British Free Range Egg Producers Association, says the situation is “unsustainable” and has called for an egg price rise to soften the impact.
“Free range egg producers have been exposed to huge levels of volatility caused by this hot, dry weather,” he said.
Last month we saw tough market conditions drive a major business with 17 producers out of business and I fear there will be more.
“Every time the price of feed rises, the small margin producers make is eroded – it doesn’t take much to turn a profit into a loss.”
Gooch added that a price rise is “desperately needed” in the short term but retailers must help prevent a repeat of the situation by offering contracts which link the price of feed with the price of eggs.
“Retailers must ensure producers have the option of a contract under which the price of feed is reflected in the price they receive for their product,” he said.
In the UK, a free range laying unit with 16,000 hens would consume in the region of 780t over the lifetime of a flock.
The increase in feed costs compared to earlier this year means producers on this scale are facing an increase in the region of £40,000 per flock.
“When the feed price drops, so will the price [buyers] pay for eggs, and vice-versa,” he explained.
“Some retailers and their packers should be applauded for successfully implementing these contracts but it needs to be offered across the board like it is in the broiler and pig sectors.”
