04 March 2015 | Online since 2003

31 July 2012|News,Poultry

BFREPA push for producer increase

The British Free Range Egg Producers' Association is pressing supermarkets for a better deal for loss-making egg producers.

Latest BFREPA figures show that free range egg producers are losing more than a pound a bird on their layer units. Losses for organic egg producers are even higher - costings for August indicate that organic units are losing £3.50 on every bird. With cereal prices sending the cost of feed soaring, losses are likely to get even worse - threatening to put many vulnerable producers out of business.

BFREPA is now appealing to supermarkets to increase the price they pay for their eggs to compensate for the cost of feed. "The escalating price of feed is a great concern at the moment," said BFREPA vice chairman Roger Gent. "It really is unprecedented. It is causing turmoil and we do need some support from supermarkets to get through this."

At one point it seemed that feed costs may begin to ease, but a combination of wet weather at home and unusually hot weather in America has hit potential harvests and sent prices sky high. BFREPA chairman John Retson has been lobbying supermarkets for some time for a better return for free range egg producers, and the National Farmers' Union (NFU), British Egg Industry Council (BEIC) and British Poultry Council (BPC) have now written to retailers to highlight the problems affecting the whole of the poultry sector.

"On behalf of our poultry meat and egg producers we wanted to bring to your attention the effect the latest rise in feed prices have had on the cost of poultry production," they said in a letter sent to the country's leading retailers.

"In the UK the poultry industry uses in excess of 5.5 million tonnes of compound feed in laying hen, broiler, turkey and breeder farming systems every year. Feed is the largest single cost item for poultry production, accounting for approximately 60 per cent of total costs. Of this feed typically 60 per cent is wheat and 20 per cent soya. Clearly, therefore, the cost of feed rations and the total cost of poultry production are highly sensitive to changes in the raw material prices of these commodities on the world market."

The letter said that prices for wheat and soya had risen rapidly because of adverse weather conditions. "In the short term, the delayed harvest in the UK has contributed with recent global commodity volatility to price increases for the remaining supplies from last year’s harvest. More critically, it is the global prospects of the upcoming harvests which will dictate poultry feed costs for the 2012/13 harvest year," it said. "Hot and dry conditions have hit the yield potential of feed grains in parts of Europe, the US and the Black Seas region."

At the latest council meeting it was discussed that BFREPA would investigate with other farming organisations the possibility of direct action being taken against supermarkets who are paying less than the cost of production.

The letter said, "Spot prices for wheat have now reached £226/t and new crop positions are also at historical highs. With the wheat futures market showing a March 2013 contract high price of £197/t, tight supplies of feed grains will force high production costs for the next twelve months. It will be only after the 2013 harvest that markets could anticipate a reduction in wheat prices.

Whilst soy meal is at £440/t, the premium for non-GM soya is expecting to continue rising and it has already risen from £35 to £65 per tonne in the last two months. As you will be aware there is no cost effective replacement for soya in monogastric diets. It is also worth noting that energy, labour and other inputs costs have also increased over the last two years."

The letter said that the poultry industry had made great efforts to invest in new capital infrastructure to grow in line with rising demand. "To maintain this vital investment producers need a sustainable margin over variable costs of production.

The year ahead will constitute a continued challenge to our supply-side costs and the poultry supply chain has worked hard to manage the unprecedented levels of volatility that have characterised agricultural markets since 2007. It is in all our interests to maintain long-term sustainable chains.
We ask that you reflect the fundamental change in commodity prices that will impact poultry industry costs when in pricing considerations and promotional schedules for the year ahead. Working together, we can ensure that production cost inflation does not cause lasting damage to the poultry meat and egg supply chains."

Roger Gent said that BFREPA fully supported the letter sent by the NFU, BEIC and BPC. He said that in the longer term BFREPA was looking at the possibility of feed clause contracts that took account of fluctuations in the price of feed. The association was also looking at benchmarking to gain a better insight into the detailed cost of production. However, he said that these initiatives would take time. The immediate need was for support from supermarkets to cover the increasing cost of feed.

At the latest council meeting it was discussed that BFREPA would investigate with other farming organisations the possibility of campaigning for a better price for producers.

Council expressed concern that producer prices were unsustainable and that balance needs to be brought back into the supply chain. Either packers or the supermarkets need to reduce their margins or consumers need to pay more for their eggs.

BFREPA costings show that producers have moved from break even to losing over £1 a bird in less than two months.



02-08-2012 20:08 PM | Posted by: graham lloyd
as a beef and sheep farmer i have seen a number of farmers in this area alone who have gone into egg production over the last three years.this has meant there are to many eggs.
they have only them selves to blame for their greed.

05-08-2012 14:55 PM | Posted by: Alan Bird
We are one of those small beef and sheep farmers, whose upland farm (300 acres) is not viable without subsidy. We invested in a free range egg business which is capable of standing alone in this severely disadvantaged area not through greed, but to try and ensure a future for this farm. What will happen to most beef and sheep farms if the E.U. and out government further reduce or even stop the subsidies and we have sat back and not invested in something else. Do your farm (beef and sheep) profits allow you to invest your entire subsidy? If not you are losing money like us.

To post comment without approval login or register

Display name

Please enter your name

Email (optional)

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.


25 February 2015
HGV1 Drivers
An understanding of farm work, as well as experience transporting livestock, would be an advantage. This role is responsible ...

17 February 2015
Internship as Business Administrator
Company and Job description This is a great opportunity for a student to gain a broad range of business experience and in the...

16 February 2015
Landscaping Apprentice
Betley Court Farm. We are looking for an apprentice to join our current teams....

2 March 2015
Site Maintenance Assistant
Liaise with Farm staff over water requirements for the Farm Park. COTSWOLD FARM PARK. Cotswold Farm Park, Guiting Power, Chel...

27 February 2015
Animal Care Apprentice
Key duties and responsibilities: Walking dogs Cleaning kennels Cleaning yards Cleaning dog beds Washing & drying bedding Feed...

Top stories you may have missed
2 February 2015 | Arable
Is EU membership damaging UK farming?

Is EU membership damaging UK farming?

Membership of the EU is damaging the British farming industry, according to...

29 January 2015 | Machinery and Equipment
Drones 'rapidly changing' agriculture

Drones 'rapidly changing' agriculture

BASIS has launched an accreditation for pilots of Unmanned Aerial Systems (...

23 January 2015 | Arable
UK wheat yields have potential to double

UK wheat yields have potential to double

UK wheat yields have theoretical potential to more than double over the nex...

23 January 2015 | Machinery and Equipment
Crowds flock to LAMMA 2015

Crowds flock to LAMMA 2015

Britain’s farmers flocked to Peterborough for the first day of LAMMA’15 to ...

22 January 2015 | Cattle
Don't blame supermarkets for milk crisis...

Don't blame supermarkets for milk crisis...

The crisis in the dairy industry is not the fault of supermarkets, accordin...

16 January 2015 | CLA
Families affected by HS2 face 'major wor...

Families affected by HS2 face 'major wor...

Transport Minister Baroness Kramer visited three rural businesses in Cheshi...

16 January 2015 | Machinery and Equipment
John Deere unveil new 6R tractor range

John Deere unveil new 6R tractor range

Spearheading the John Deere range of mid-size tractors from Mannheim, the n...

14 January 2015 | Animal Health
Monthly TB checks more effective than ba...

Monthly TB checks more effective than ba...

Regular testing for bovine TB could significantly reduce the number of infe...

12 January 2015 | News
Government regulations hampering UK agri...

Government regulations hampering UK agri...

Single-issue policy-making threatens to hamper, not help, the progress of U...

8 January 2015 | Cattle
2015: The year ahead for the beef market

2015: The year ahead for the beef market

2014 has been a “rocky old year” for the beef industry but better prices ar...