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4/20/2007
Organic price rise on its way
Hard-pressed organic producers who have had to absorb unprecedented hikes in feed costs are finally in line for an egg price increase.
The development comes on the back of a lift at retail level which has seen the shelf price of a dozen organic eggs increase by up to 30 pence.
Tesco made the first move, increasing the cost of 12 medium eggs from £2.69 to £2.99 and 12 large from £2.95 to £3.25. The retailer lifted its organic half-dozen packs by 14p. Sainsbury's, Asda and Morrisons quickly followed with similar increases.
BFREPA chairman Tom Vesey welcomed the news but added that it was vital that producers got a decent slice of the increase.
"The very future of organic egg production has been threatened by the crisis surrounding escalating feed costs and we've been pushing the packers for an increase in producer price since February," said Tom.
"This is a significant lift at retail level and one that gives ample scope for producers to be fully compensated for the extra money they are shelling out for feed. It must not be used by retailers as an opportunity to further boost their margins at the expense of producers."
Due to an acute shortage of organically-grown wheat, producers have seen the price of organic poultry rations jump by £60 a tonne to £300. BFREPA calculates this represents an increased cost of 13p for every dozen eggs produced.
When the Ranger spoke to Geoff Cooper, sales director for Deans Foods and now also responsible for the company's contract producers, he could not say whether producers would be getting the full 13p.
"Getting the retail price increase in place was the first step in the process of getting more money back to producers," he said.
"But because we have yet to complete negotiations with retailers it is difficult to say exactly how much we can pass back to producers or when it will be. It will, however, be as much as we can and as soon as we can."
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