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The speed in which the egg market turns is one that might surprise many new producers.
But this is a cyclical industry in which the fortunes of the egg producer are determined by feed, and the supply and demand for our eggs, as a result of egg consumption or farm expansion. The trouble is too many of the elements which determine our fortunes are out of our control.
The warning signs of this downturn were there for all to see. BFREPA have been banging the drum for some time, whilst ensuring members have had planning data and information on issues which affect the industry. Alarming numbers of applications to planning offices have eventually tipped the balance – forcing the price down.
Rising inputs and lower egg prices are going to make 2019 a very challenging year for egg producers. I do worry that the supply and demand model in the egg industry is not working for the producer.
We have falling egg prices during periods of over production but where are the balancing rising prices when supplies have been tight in the past?
Our planning data, and the chick placing statistics shows that free range expansion has paused, but those projects are only dormant and will spring to life when there are signs that the market is returning to balance.
I have been around long enough to remember previous periods of consolidation within the free range sector, when attention inevitably turns to production size, where smaller less commercially viable production give way to larger units.
I think most producers who are not aligned with a feed tracker will have seen the price paid for their medium, small and second grades reduced over the last month.
Friday’s were the latest to reduce the price they paid for medium eggs by five pence which followed a similar reduction by Noble.
There is a fundamental problem here, and a welfare issue to boot. As an industry, and without wishing to be alarming, we need to educate retailers and consumers to the laying cycles of a free-range hen and the welfare concerns we have for birds being pushed to lay larger eggs.
Today I read about the Iceland Christmas advert which was banned for portraying a political message. As part of its festive campaign the discount supermarket struck a deal with Greenpeace to rebadge an animated short film featuring an orangutan and the destruction of the rainforest at the hands of palm oil growers.