Free range egg crisis: shoppers need to pay 40p more per dozen
Published on : 31 Mar 2022Free range egg farmers are today calling for the UK’s major retailers to immediately increase the price of a dozen eggs in their shops by 40p to avert a catastrophe in the sector. Farmers are being hit from all sides by huge hikes in energy and feed costs, as well as an increase in labour costs and raw materials. A huge number of free range egg farmers are currently losing money on every egg laid by one of their hens. Some say they can last six months before they go bust, while others are on the brink now. The message has been backed up by the British Egg Industry Council which has today also called for an immediate price rise to save farms. Eggs are one of the cheapest protein sources on the planet, but the British Free Range Egg Producers Association (BFREPA) says farmers have been cut adrift by an unrelenting squeeze on their profit margins which have now been completely eroded in many cases. Farmers are asking for an increase in the price of eggs in the shops, but it is vital that the money makes its way down the supply chain to the farmers who need to save their businesses from collapse. BFREPA’s CEO Robert Gooch says enough is enough and that the sector’s appeals for help can’t be ignored any longer. He said: “For months we have been raising the desperate situation with all the major retailers, and they have all ignored the perilous position their farmer suppliers are in. We contacted Asda, Sainsbury’s, Morrisons, Tesco, Waitrose, Lidl, Aldi and Marks and Spencer. Not a single reply was received. “There have been small rises in the price of eggs in shops, but that money has evaporated before it gets to the farm gate. It’s the same old story of the farmer at the bottom of the chain being the last to see any price rise. “This is not a false flag – the free range egg sector is in crisis and if something doesn’t change these farms will close and the people who run them will not have an income. This is a situation entirely out of farmers’ hands. The whole world can see that feed and energy prices have gone through the roof – that has consequences and we believe shoppers will understand the need for the egg price to increase on the shelves.”Dan Brown, who has 44,000 hens in Suffolk, has been farming for 18 years but says he will be “in serious trouble” if the situation doesn’t change in the next six months. “Our feed costs are up 40%, energy is up 60%, and to bring in the next flock of hens is going to cost 10% more,” he said. “Add in a labour increase of 10% and we are probably losing about 2-2.5 pence on every egg laid on the farm. “Realistically I should cancel the next flock, but farming is a long-term game and the eggs are already in the incubators waiting to hatch so we are already committed. “We will be in serious trouble if the market hasn’t turned by the autumn, but it needs to turn immediately. There is no excuse for retailers not raising prices immediately. Everyone knows this isn’t producers crying wolf – commodity prices have soared. “I can’t really understand the supermarkets’ tactics, they must know that if they carry on like this then they will have no eggs by the autumn?”Tom Pope from Somerset has only been in free range egg production for six months and says the situation is dire. He said: “The feed price alone increasing by £100 per tonne adds 20p to the cost of producing a dozen eggs on the farm, and every consumer will have heard about the energy price rises that are about to hit. For us, that means our energy bill will increase 200% on the current deal we have, leaving us with £40,000 to pay. “My business needs a price rise now, in addition to keeping a tracker condition on the feed price which goes up and down with the market. The alternative is having to go it alone and sell eggs on the wholesale market to survive, but that’s not what I want to do and not what the whole industry can do. The situation at present is desperate.”BFREPA is calling a crisis summit and inviting every major retailer and packer to attend to outline what they are doing to help support farmers. BACKGROUND ON COST INCREASESIn addition to farmers’ feed and pullet costs, the egg industry is also seeing other supply chain costs increase including transport, labour and packaging significantly adding to the cost of production.• Feed (increase of approximately 50%)The cost of feed for egg laying birds is now £400 per tonne, up around 50% over the past two years, and is expected to rise even further with Russia and Ukraine being major exporters of key raw materials used in the feed. • Pullets (increase of approximately 15%) The cost of pullets has risen by 5% over the past month and more than 15% in the past two years.• Transport (increase of approximately 30%)Fuel costs continue to increase at record levels, impacting the whole supply chain, from delivery of feed stuffs right through to the delivery of a box of eggs ready for sale. • Labour (national minimum wage increase 7%)There are significant labour shortages in a wide range of industry roles; on farm, in packing stations and egg processing plants. This has led to significant wage inflation, which will also increase with the rise in the National Minimum Wage• Energy (increase of approximately 40%)The wholesale cost of gas from suppliers has increased by 250% since the start of 2021 and with Britain generating around a third of its electricity from burning natural gas, electricity costs are also increasing. • Packaging (increase of approximately 15%) Figures from letsrecycle.com show that the cost of recycled paper, which is used for packaging, has increased by 50% in the year to August 2021, while energy costs, a key component of the manufacture of packaging, are also seeing record increases. Prices of egg packs have risen by more than 15% since November 2021.