Egg Producers get shock 5 pence drop
Despite supermarkets raising prices, two of the UK’s larger egg packers have dropped the price they pay to egg producers by a further 5p per dozen. Other packers are expected to follow with reductions.
Stonegate and Oakland both blame the excess of egg as the reason for the latest price decrease.
Egg producers are already struggling with many units now in a dire financial situation whilst supermarkets have taken full advantage of the excesses in the egg market and raised the shelf price by around 23 pence a dozen.
On top of this packers have written to producers instructing them to deplete flocks at 68 weeks instead of the usual 72.
Meanwhile Waitrose have raised the price they pay producers who produce eggs under their Columbian Blacktail scheme by 2 pence a dozen from Sunday 13th February.
The worry now is as the industry got the figures leading up to the excesses so drastically wrong the same organisations are now pushing the industry the other way. With the number of free range and caged producers now leaving the market it should be no surprise to anyone that the figures point towards a shortage by the year end. A shortage would also be disasterous for the industry probably resulting in more imported egg.
Latest DEFRA chick placement figures for December show a positive 3% drop on the same month last year. However December 2010 represented a 5 week period compared with a four week period in 2009 so the drop in real terms was 22%. It is estimated that the current UK laying flock is over 34.5 million birds. Two to three million over the estimated sustainable level of 32 million.
A spokesperson for BEIC issued a statement last week saying they cannot be blamed for the current market over-supply situation.
"The BEIC has two roles only – it represents the egg industry politically (on behalf of its 11 industry member organisations) and runs the Lion Code of Practice and accompanying promotional programme, funded by a voluntary subscription from Lion-registered egg packers and producers.
It has no involvement in industry commercial activity, nor any remit to manage the egg market – indeed any form of market management by a trade association is illegal under competition law."
Producers are already discussing organising demonstrations outside supermarket branches. One producer told Farming UK "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."
