June 22, 2011

UK egg producers facing crisis on payment cuts

The UK's free-range egg farmers are facing economic ruin because their payments are being cut, the British Free Range Egg Producers Association has said.

Latest figures from the British Retail Consortium show that food inflation was up to 4.9% in May compared with 4.7% the previous month. Yet the leader of the UK's free-range egg producers says that egg farmers are making huge losses because payments from supermarkets and packers have been cut. The cuts in payments have come at the same time that farmers' feed costs have increased substantially - largely because of the soaring price of wheat on international markets.

"Free range egg producers are facing a desperate situation," said John Retson, chairman of the British Free Range Egg Producers Association (BFREPA). "We see reports in newspapers and on the television that the price of eggs in the supermarkets has been going up along with the price of other foods, but egg producers have seen the price they receive cut by five pence per dozen."

"At the same time, since the turn of the year costs have increased by the equivalent of 15 pence per dozen because of world commodity prices increasing the cost of feed. Egg producers face being forced out of business," he said.

Free range egg producers are being told that there are simply too many eggs on the market at the moment, and the packers' organisation, NEMAL, has warned that this position could continue into next year.

However, chick placements have been falling - something that will eventually reduce the size of the national layer flock, and impending EU legislation will ban the use of conventional layer cages from January 1, 2012. The amount of eggs that will be removed from the market when conventional cages are banned is unclear at the moment, but some people fear that we may be left with a shortage of eggs in the UK if too many free range producers are forced out of the industry because of their current losses.