Price drop blamed on weak market

Slow sales at retail level—combined with an easing of feed prices—has led to packers cutting producer prices across all egg types.

The country’s largest packer, Deans, knocked nearly three pence off their free range price while Stonegate producers faired slightly better with a two pence reduction.

In a letter to producers Deans managing director David Tromans told suppliers: “The retail demand for eggs has weakened progressively since March along with wholesale prices, a combination which has seriously eroded our overall yield from the market.

“Conscious that feed prices remained high we have absorbed the cost of these changes for as long as possible. However, the wholesale market has now hit new lows and feed costs are easing, which means that it is time to more accurately reflect market conditions in our price structure.”

BFREPA chairman Tom Vesey said that he was disappointed to see the drop and surprised at its magnitude.

“With feed prices easing a drop in producer prices was always on the cards,” said Tom. “But the packers mustn’t lose sight of the fact that producers have faced increases in production costs other than feed and a drop of this size will eat into margins.”

Tom was also concerned about the prospect that problems of over-supply in the intensive sector could be used as an excuse to drag down prices for free range producers.

“Clearly the cage market is in a mess but we believe the demand for free range and organic has remained strong this year and we don’t want to see a return to the days when our eggs are used to prop up the general egg market.”