Free-range egg expansion ‘unsustainable and unnecessary’

16-10-2020 | | |
The free-range layer sector in the UK is growing at a pace supply is outgrowing demand. Photo: Joris Telders
The free-range layer sector in the UK is growing at a pace supply is outgrowing demand. Photo: Joris Telders

Concerns are growing that further expansion of the free-range egg sector in the UK will create a significant oversupply, driving down prices paid to farmers and reducing profitability.

Concerns have been raised by the British Free Range Egg Producers Association (BFREPA) following the release of an independent report by consultants ADAS, which shows that free-range production has grown by 14% since 2017 to 25 m hens. In the report, ADAS forecasts just a 2% production increase is needed over the next 5 years to meet a predicted growth in free-range egg demand of just 300,000 cases.

Robert Gooch, BFREPA chief executive officer, said there was an incorrect assumption from many in the sector that retailers moving away from colony eggs would lead to a surge in demand for free-range but this was not the case. “We have been warning for many years that rapid expansion will create a situation of oversupply, all the while the price paid to farmers has diminished and is now 20% lower than it was 5 years ago.

The trend is clear; as production as increased, the price paid to farmers has decreased. The situation is unnecessary and unsustainable,” said Mr Gooch.

Cage and free-range supplement each other
About 60% of laying hens in France are kept in enriched cages. However, the market for cage eggs is shrinking. This made Gwenael Carree want to expand his farm with a free-range poultry barn in 2017.

Model contract for free-range egg producers

A model contract was made available to all free-range egg producers last year to help secure sustainable prices for the long term. And to help producers, some of whom are very new to the sector, BFREPA has launched a new online Costings Portal allowing farmers to enter flock data and egg prices to compare their situation with others across the UK and Northern Ireland. Data has shown that most free-range egg producers are currently not breaking even: “Our data from ADAS shows a break-even price of £1.01 per dozen, but our members are submitting prices through our portal which show that they are being paid significantly less than that – about £0.88 per dozen on average,” added Mr Gooch.

Free-range eggs supermarket sales

Jason Gittins, technical director ADAS, said average sales of free-range eggs in Tesco, Asda Aldi and Lidl was around 65%. If this increased by 10% to 75% with new customers coming into the market it would require an additional 1-1.5 m cases but there was doubt whether this will happen. “To speculate on it would not be wise,” he added.

Keith Wild, editor of the free-range publication The Ranger, said it was important for all members to take part in the costings portal to boost transparency, adding that several new producers had said they would not have gone into free-range egg production had they known the likely prices they would receive “The last 10 years haven’t worked…so a little bit of transparency may just be the answer,” he said.

Join 31,000+ subscribers

Subscribe to our newsletter to stay updated about all the need-to-know content in the poultry sector, three times a week.
Mcdougal
Tony Mcdougal Freelance Journalist





Beheer