Slow progress for egg price increase

Picture: David Tromans, Managing Director, Deans Foods

Progress towards achieving another egg price increase to offset rising production costs is proving slower than anticipated.

Managing director of Deans Foods, David Tromans, told the Ranger that the “going was tough” but added “we will continue to make the case for a price increase with the retailers because we are acutely aware that egg producers are continuing to pay high prices for feed and face rising costs on non-feed items, most notably replacement pullets.”

Although there is brighter news concerning future feed costs—with wheat prices easing—association chairman Tom Vesey said that BFREPA would continue to push for a two pence increase in producer price.

While he welcomed the better news about the feed market, he felt it would be sometime before lower prices filtered through to producers.


“From what we can see, many producers still face the prospect of dearer feed next month, it’s just that the increase probably won’t be as steep as first predicted,” said Tom. “Margins are still being eroded, with pullet price increases now beginning to hit home and fixed costs climbing all the time.”

Martin Humphrey, a director of Humphrey Farms who are both feed compounders and egg producers, agreed that there was little prospect of an immediate reduction in feed price.

“Wheat has come back from a July 2004 high of around £126 a ton to just over the £100 mark,” said Mr Humphrey. “But you have to remember that compounders will have bought forward and taken some cover at the high end of the market.

“Compounders’ forward cover protected farmers from the worst of the commodity price rises as the market rose, but means that they will also have to be slow to reflect the fall in the market.

“Lower wheat prices will certainly ease the pressure on compounders but soya is still trading at contract high levels—16 year highs for soyabeans in dollar terms—so it is going to be some time before producers see any real reduction in feed price; probably post harvest.”