Extra money for organic producers

Organic producers will welcome the news that packers will be increasing egg prices to offset the cost of rearing pullets to new EU rules.

Any pullets destined for organic units and placed on rearing farms from 1 January this year have to be fed an organic ration and treated according to organic veterinary guidelines. With the EU still to agree full organic rearing standards, pullets raised under the new regime have been dubbed ‘part-organic’.

Egg packer Deans Foods calculates that the extra cost involved will be around £1.25 a bird and has told producers this will be paid in the form of a bonus of five pence a dozen from May onwards as the first organically fed birds are housed. All producers have to do is prove that the birds have indeed been reared to the new standards. At the end of a full cycle, this extra money will be built into the basic organic price.

But as reported in last month’s Ranger, there are fears of an organic egg shortage later this year because many producers have failed to arrange for pullets to be reared to the new specification.

Steve Carlyle of Country Fresh Pullets told the Ranger that his company continued to receive last-minute orders for part-organic birds and he confirmed the price would be £1.25 over that of a standard pullet.

“But this figure will leave us out of pocket if there is any under-utilisation of buildings,” said Mr Carlyle. “The £1.25 figure is fine if, say, we can rear 6000 birds in a 6000 bird house. But if we have to put that number of birds in a larger house due to insufficient orders then the extra cost could be nearer to £1.50.

“What won’t be an option will be filling the house and feeding all the birds organically, only for some to be sold at conventional pullet price.”

Olivia Potter, who heads up the rearing operation of Midlands-based Potters Poultry, has also been taking orders for organically-fed pullets.

“Fluctuations in feed price have made it difficult to give customers an exact price but we should be able to do it for £1.25 above the price of a conventionally reared pullet,” said Ms Potter, who agreed that under-use of facilities was a potential problem and one that could impact on the cost.

“We have very few buildings that are suitable but we’ve earmarked some smaller houses and we just hope we can keep these filled.”

In announcing the extra money for producers, Deans took the opportunity to reveal it was reviewing its organic egg price structure, which the company says had become “overly complicated”.

A base price will now exist for those producers stocking at over six birds per sq metre, regardless of whether the birds are housed in mobiles or static buildings.

For producers who don’t qualify for this derogation on EU stocking rate and flock size rules, thereby operating with flocks of no greater than 3000 birds and stocked at six birds per sq metre, an additional 10 pence a dozen will be paid on eggs falling into the first three weight grades. For farms approved by the Soil Association, this premium over the base organic price stretches to 17 pence a dozen.

Stonegate told the Ranger it too will be compensating its organic producers on its standard producer contracts for the additional costs of complying with the new organic rearing rules.

“The amount is yet to be determined but the matter is under review and current indications are that producers will receive additional payments as the birds reared under the new rules start to lay,” said commercial director Nick Rogers.

Organic feed price warning

According to a leading supplier of organic poultry rations, producers could be facing a hike in feed prices as supplies of raw materials dry up.

Martin Humphrey of Humphrey Feeds is warning that organic wheat supplies are running low both in the UK and Europe.

“Wheat prices have lifted in recent weeks and are likely to rise further still,” Mr Humphrey told the Ranger.

“New crop prices are lower than the end of this season's level reflecting the availability of new crop organic wheat but they are not down to the levels experienced at the beginning of this season.

“On top of this, organic peas are running out so with tightened supply, prices are likely to rise. Rape and sunflower oilseed are also in tight supply and their price will rise with no apparent fall for new crop.

“In addition, the price of fishmeal, which makes a valid nutritional contribution in some organic diets, is rising rapidly due to a dearth of caught fish. It’s already £120 per tonne more than last year and is pricing itself out of rations. This means that the cost of diets where fishmeal has been used will be forced up higher still.

“The only good news appears to be organic soya which is plentiful enough for prices to be undisturbed.”