October 19, 2010

UK egg packers raise prices on feed costs surge

Two major packers have raised producer prices following lobbying by the British Free Range Egg Producers' Association (BFREPA), and others may follow.

BFREPA chairman John Retson warned packers, highlighting the severe hardship hitting free range egg producers and subsequently met packing company representatives to press the case for increased producer prices. Some packers had cut prices by more than 16 pence per dozen in recent weeks. With feed costs up by the equivalent of 6 pence per dozen, many producers found themselves 22 pence per dozen worse off, leading to fears that some individuals could be driven out of business.

Both Noble and Fridays have now announced increases to help compensate producers for the increased feed costs, and John Retson said the move is good news. "I welcome the increases because the prices were simply unsustainable. The prices we have been running with represented a loss of more than GBP3 per pullet. That is just unsustainable so I am pleased that packers are responding to what is happening with the feed price."

Following the meeting with John Retson, Noble announced that it was increasing prices by six pence. Martin Troop said the company was "working positively with BFREPA, recognising the serious impact rising feed prices are having on producers."

Recent reductions in the price paid to egg producers have been blamed on oversupply. That has been caused by the large number of new entrants to free range egg production.