Egg producers are facing lower charges for flock disposal following competition between old hen processors.
HFC Poultry—who took over the Bradford based plant formerly run by Bronte Foods—is reported to be clearing hens at no cost, although a charge is being made for catching.
Director Mike Feeley confirmed that some producers were not being charged but said it was only those with large numbers who were supplying the plant with regular throughput.
“We have no fixed scale of charges, it is very much down to the individual situation,” Mr Feeley told the Ranger.
Earlier this autumn Stonegate secured a deal with the processor whereby its contracted producers had a guaranteed outlet for their hens. Provided that birds were booked in with HFC by the beginning of November, producers would be charged only three pence a bird for depletions throughout next year, whatever the flock size. Catching costs would be on top of this.
Commenting on the deal, Stonegate’s Richard Kempsey said: “The volatility seen in the hen market during recent times has affected all producers, but it has been particularly difficult for those with smaller flocks. We are delighted to have secured this deal for we are well aware that placement of spent hens is paramount to the ongoing sustainability of our business.”
The country’s largest processor of old hens is Deans Foods and its operations manager Martin Troop said that while some flocks were being cleared for no charge, it tended to be only those that were close to the company’s Lincolnshire plant and of a reasonable size.
“Where we are making a charge the level is dictated by distance and numbers, it’s as simple as that,” said Mr Troop. “As egg producers ourselves we know how crucial it is to have flocks cleared at the end of lay and we will always endeavour to help producers, whatever their size or location. But if we have to send a lorry 250 miles to pick up 2,000 hens, it is only reasonable that we make a realistic charge.”
Deans told the Ranger that the maximum it was charging currently was 10p a bird. But this was only for very small flocks which were located a long way from the plant and represented only a small amount of the company’s throughput. The average charge across all birds coming into the plant was currently two pence.
“Two years ago the market collapsed and producers were being charged up to 16p a bird in some instances,” said Mr Troop.
“Although the market has improved from that low point, prices for finished product have only increased by a few pence a kilo.
“We are continually improving efficiency through the plant which helps to keep costs down, but it is still a very low-margin business. While we can’t afford to be too much out of line with the competition, I do not believe that a no-charge policy will be sustainable in the longer term.”
