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Free-range egg producers ask retailers for 10p/doz price rise

Eggs Stacked On A Pallet.

FREE-RANGE egg farmers have said that inflation has caused a 10p/doz increase in their cost of production and asked retailers to ensure higher prices paid by consumers are passed down the supply chain.

Research by the British Free Range Egg Producers (Bfrepa) suggests that feed – accounting for 60% of production costs – is up 14% while energy costs have soared by 40%, but the average egg price has only risen 2% in the past 12 months.

See also: Egg market tightens after disappointing Christmas

Despite this, eggs sold at retail have risen by 13%-17% in price over the same period, research by the organisation found.

Bfrepa is asking for a 10p/doz price rise for free-range egg producers and a 20p/doz increase for organic farmers.

The organisation’s chairman, James Baxter, has written to supermarkets to ask they ensure producers’ farmgate prices for eggs reflect the inflationary pressure on businesses.

Independent operators

Feed-linked egg contracts with packers, which tie producer prices to the cost of feed, have become more common in recent years.

But many farmers still operate independently, choosing to buy in feed and other inputs and sell eggs to packers at the best market rate they can achieve.

Mr Baxter said: “While many of your suppliers, the packers, are also suffering from the inflationary pressures, most of them will have a fixed price or feed tracker contract with you.

Variable contracts

“However, the producers I represent are largely independent micro-businesses who do not have a direct relationship with you…

“These free-range egg producers typically have a variable price contract with your supplier – the packer, their customer – and are very vulnerable to spikes in feed and other prices.”

He added in the letter he hoped to meet with retailers to discuss an equitable return of higher supermarket egg prices to farmers.

“Your customers, the final consumer, are constantly asking for high welfare, carbon-neutral free-range eggs, but it is impossible for free range egg producers to reinvest in the environmental and economic sustainability of their farms while they are being paid egg prices by your suppliers at below the cost of production.”