September 9, 2022

 

High energy prices, increased feed costs threaten to spike egg prices in Estonia

 

Egg producers in Estonia are seeing their situation being complicated by both rising energy prices and inflation in the cost of poultry feed, meaning the price of eggs in the stores may get even more expensive in the fall than its current, high level.

 

At the same time, store chains argue that the market makes its choice based on price.

 

In April of this year, the price of eggs rose sharply, with this attributed to the increase in the price of chicken feed. The price of organic chickens' eggs rose by 10% in the spring, for instance.

 

Lauri Bobrovski, board member of egg producer Äntu Mõis OÜ, told ERR that this inflation did not, at that stage, reflect effects from the war in Ukraine and what has transpired with energy prices, whereas a new price hike now awaits, as a result of these factors.

 

Animal fodder is also a concern for businesses in the sector. Vladimir Sapožnin, a board member at Dava Foods, the largest egg producer in Estonia, said that whereas the company usually buys feed-quality fruit, this summer's weather was so good that there is no feed-quality fruit available in the country - everything is of a higher grade so that they are actually much costlier.

 

Dava Foods considers a price increase in fall quite likely. Sapožnin said: "We have bought some feed stocks in advance, but we cannot buy grain in advance for the whole year. We may have to raise the price of eggs in October-November, but time will tell."

 

According to Sapožnin, it is difficult to calculate the average price of eggs at this point, since there is a proliferation of producers, countries of origin, and egg sizes and grades. While the price of eggs may still drop in stores as a result of of price promotions, Sapožnin noted that prices of from producers as a whole have not decreased since spring.

 

He added: "Stores play with their pricing all the time. Eggs has been seen as a product that was extremely cheap, senselessly so."

 

Sapožnin considers the rise in energy prices to be less of a concern than the increase in the price of feed, since the latter accounts for 70% of the cost of eggs — at least at his company.

 

In Estonia, the experience of store chains shows that a large number of customers buy their eggs based on price, while public price sensitivity is much higher than before.

  

"Since the rise in the price of eggs has been substantial this year, the share of sales of the cheapest produce has risen, that is, a large number of customers make their choices based on price, choosing the cheapest on offer," said Rimi's purchasing manager, Talis Raak.

 

Tiia Schapel, head of Maxima Estonia's marketing and public relations department, concurred, that their customers also saw price as key.

 

Schapel said: "During discount campaigns, L-sized white eggs tend to do particularly well. Regarding our permanent selection, the demand for brown M-sized chicken eggs has grown the most over the past three months."

 

At the same time, Schapel noted that compared with the first months of the year, their demand for M-sized organic chicken eggs from Poland, which do not belong to the cheapest price category, also risen by a third.

 

- ERR News