WHOLESALE egg prices have strengthened again over the past month, with both colony and free-range sectors making gains.
An intense shortage of colony eggs, in particular, is driving the market and has pushed wholesale prices up by 28-30% across the top three sizes since the beginning of the year.
Free-range wholesale prices have also risen, although by far less. It means that the price gap between the two sectors has fallen to a single digit (7-8p/doz) for the first time on record (see chart below).
The tight egg market is a result of a decline in the size of the laying flock, intensified by the loss of a large number of birds from avian influenza (AI).
Although pullet placings have fluctuated up and down from month to month, they have shown a steady downward trend overall for 18 months.
This has led to a drop in the laying flock of around two million birds since January last year. That is before any additional losses due to AI are taken into account.
There is more to come.
Over the past four months, an even sharper cut-back in chick placings is likely to see the laying flock fall by a further 1.7 million birds by June, to its lowest level for five years.
“We’re not being offered a great deal at the moment,” said Andy Crossland at the Central Egg Agency, confirming the general shortage.
“It’s a difficult market. We have the scenario where most of the egg that we do get offered is having to be put through wholesale because packers can’t afford them (for the retail sector).”
At some point, the prices paid by retailers would have to rise and be passed on to consumers, said Mr Crossland, and the extra income channelled down to producers.
He said the higher wholesale prices needed to be put in perspective.
“Nobody’s making money out of them because all costs have gone up. It’s where prices need to be, just to stand still.”