Markets: Egg sector feels the pain as prices sink
It’s proving to be a tough summer for the egg sector, especially free-range producers, with overproduction weighing on the market and feed costs piling on the pressure.
Free-range prices at wholesale have dropped for the third successive month, with smalls and mediums hit especially hard. Prices at the Central Egg Agency for these 2 sizes are down 45 p/doz and 35p/doz respectively over the last 2 months, while Large have fallen by 15p/doz.
PACKING STATION SUPPLIES
By contrast, wholesale colony prices have largely stabilised over the past month, and the larger sizes of colony eggs are in demand. Both sectors, however, are sharply down since Easter, and some sizes have halved since Christmas.
Andy Crossland at the CEA identifies 2 factors which have put the skids under the market, both linked to the continuing expansion in the free-range sector.
EGG PRODUCER PRICE: FEED PRICE RATIO (FREE RANGE)
With a lot of new flocks coming through, supplies of the smaller sizes were peaking, whereas the dominant demand was for larger grades at retail level.
EGG IMPORTS
EGG EXPORTS
“It’s a bit out of balance in what we are producing to what retailers want to sell.
“That’s part of the problem, and then there’s the sheer volume of the new production coming through at a time when retail demand is at its quietest.”
UK AVERAGE PACKER/PRODUCER PRICES
PULLET PRICES
To attempt to ease the situation, several large colony flocks had been taken out of production early to make a bit of room for the newcomers, but “that has left us with shortages on colony large and very large”.
INDEXED WHOLESALE PRICE, AV SIZE LARGE
SIZE OF UK LAYING FLOCK
“At both retail and wholesale level, we’ve got packers and wholesalers looking for large colony eggs.”
Things could start to improve at the end of the summer, said Mr Crossland.
UK LAYER PLACINGS
“You’d expect things to start to lift in early to mid September, when retail demand does normally improve at that time of year.”
Further down the road there is the prospect of another increase in the size of the laying flock. Latest chick placing figures indicate the UK laying flock could hit a record 38 million in November.
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