Crisis in UK egg sector as production costs soar

13-04 | |
Egg farmers in the UK are facing a startling speed and scale of rising costs. Photo Koos Groenewold
Egg farmers in the UK are facing a startling speed and scale of rising costs. Photo Koos Groenewold

Hatcheries, breeders and farmers have joined forces to write to retailers to say the unprecedented rises in the cost of producing eggs are leaving many on the brink of bankruptcy. They say that hundreds of farmers are in real danger of going out of business if returns do not significantly improve.

Joice and Hill Poultry – part of the Hendrix Genetics global breeding and hatchery business – said due to the speed and scale of rising costs facing egg producers, it was seeing a startling fall in chicks being placed by the industry.

A sharp decline in the size of the UK laying flock

The company, which hatches one-third of all UK laying hens, said the shortfall was coming on top of the 1.5 million hens that have been lost over the winter due to avian influenza. Statistics from the UK’S Department for Environment, Food and Rural Affairs (Defra) show a sharp decline in the size of the UK laying flock since the start of the year. Projected figures also predict the UK flock will fall to 37 million adult laying hens in July compared to 40 million in 2020 and 2021.

In the letter, it said: “By July 2022, the adult laying population (20-72 weeks) will be 3 million less (9%) than the previous 2 years and this downward placement trend looks set to continue. The UK’s self-sufficiency increased to 92% last year; however, with producers forced to leave the sector, and will cancelled chick and pullet orders, we are really concerned for the future of our industry.

“On the European market, Ukrainian egg production is affected by the war and their eggs and egg products usually exported to EU states have stopped. EU egg producers face the same production cost challenges as here and we expect to see similar reductions in the flock size of EU member states. Egg prices are already spiking in the EU.”

Various challenges facing UK egg sector

Joice and Hill said among the current challenges facing producers were:

  • An increase in feed price of around £150/tonne for conventional feed compared to the 2016-20 average, which on its own will add £7.50 to the cost of keeping a hen or 30p/dozen eggs.
  • A rise in electricity prices of between 150-200%, with gas going up 6-fold and diesel by 50%.
  • The ongoing issues around labour cost and availability post-Brexit.
  • Other input rises including packaging and accountancy.

The British Egg Industry Council (BEIC) added that the costs of pullets had risen by 15% over the past 2 years, while fuel costs had gone up by 30%, labour by 7% and packaging by 15% in just a few months.

A “tidal wave” of cost increases

Andrew Joret, BEIC chair, said this “tidal wave” of cost increases would lead to many family farms going under in a matter of days unless something is done quickly.

“The situation was unsustainable prior to the terrible war, but feed prices have accelerated dramatically in a way never before seen and farmers cannot absorb these costs and carry on with a viable business. Ten years ago, you might have typically paid £1.35 for 6 medium eggs, which today costs less than £1 which is a third of the price of a barista coffee. Eggs are one of the most undervalued natural whole foods, packed with protein, vitamins and minerals… However, without rapid recognition of the seriousness of the situation, a significant number of British farmers won’t survive to continue to ensure that one of the nation’s favourite home-produced foods is readily available on the table.”

Mcdougal
Tony Mcdougal Freelance Journalist
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