September 21, 2012

UK egg producers face crisis as feed prices soar

Due to rising feed costs, UK farmers have warned of a looming shortage of free-range eggs because producers are being forced out of business.

The British Free Range Egg Producers Association (BFREPA) claims farmers must receive a higher price for their eggs to put a halt to an exodus out of the sector.

The situation is exacerbated at the moment by an over-supply after more farmers switched to free-range production. John Widdowson, who farms at Stoodleigh, near Tiverton, has seen feed prices soar by a fifth in the past year alone, as a result of poor harvests across the world. "When that's your biggest single cost, it has a massive impact on your business," he said.

He estimated that GBP0.10-0.15 (US$0.16-0.24) more should be paid for half a dozen eggs, and said: "Of course retailers need to be competitive. But farmers need to make a living, and for that to happen there will have to be a price rise."

Free-range egg producers say they are particularly hard hit because their hens get through 10% more feed than indoor-reared birds, because they burn off more energy.

But Colin Carter, who sits on the National Farmers Union regional Poultry Board, said over-supply was as big a problem as feed prices, in part after farmers took up incentives to produce free-range which were offered to stop any production flow when the ban on battery cages came into force in January.

He said it was the "worst year" he had ever experienced, but said: "If the supply was in balance then the price would come into balance and we would all make a living."

John Warne, South West spokesman for the BFREPA, who farms near Dulverton on Exmoor, said he made no money last year. He has arranged finance to see him though, but said: "A couple more years like that and we would have to close, and many farmers are feeling the same."

But Andrew Opie, of the Consortium of British Retailers, which represents supermarkets, said members were committed to selling British free-range eggs, and it was in their best interests to have a paying policy which would ensure a constant supply.

He said supermarkets recognised the pressure farmers face, and added: "It's important farmers make a margin, therefore retailers try to balance the price that consumers are prepared to pay with getting the right price to farmers to allow them to invest."