18-03-2009 19:58 PM | Chairmans Comment

March 09 Chairmans Comment


The egg market is very tight at present. This is unusual at this time of year and there seem to be several reasons for it. In spite of the overall financial climate there is still a growth in free range, and the principle of buying eggs that do not come from caged birds seems to be established. The weak pound has made imports expensive. Eggs are at last deemed to be good rather than bad (thanks to the hard work carried out by the BEIS), they are a still a cheap form of protein and due to their satiety value can help to fight the dreaded obesity! Shove Tuesday (pancake day) is now more and more popular principally due to celebrity chefs, and lastly we have had a spell of cold weather.

All this is, on the face of it is good news, but it has a worrying side. We are going to have to increase production over the next few years and after 1st January 2012 it is going to be more and more important. Failure to do so will open the door to imports. Thanks to the Lion code and Freedom Food, the British egg industry has been almost uniquely protected, but if retailers can not obtain product from this country they will be forced to import, whatever the cost. I understand that at least one large retailer sold out of free range eggs recently and could not obtain any more. This is inexcusable and very dangerous. I hope it doesn't happen again.

The recent producer price increase of 3 ½ p per dozen was welcome but it is not enough. All it did was to compensate for the rise in feed price. The relative underlying unprofitability remains. It is certainly true that an established unit with a good crop does produce a small profit. But we all have crops that are less than excellent from time to time and the profit very quickly turns into a loss.

There is just not enough to encourage investment in a new unit. To that must be added the difficulty in borrowing money. Banks are particularly cautious at present and need to be convinced that the borrower is on a sound financial footing. I heard of one producer, recently, who was refused an increase in his overdraft and I am sure there are many more in the same boat. Packers have got to look long term and ensure that producers are profitable or the inevitable result will be an increase in imports. Once that has become established and consumers have got used to buying foreign eggs because there are not enough British ones it will be very difficult to stop the trend.

In theory we are in a good position. We have a product that consumers want and demand is still growing. Over the past 20yrs the industry has invested a great deal of money, time and thought in to improving facilities and bird welfare. We believe that we can produce eggs to as high a standard as anyone else in the world and considerably better than some, but we must have a fair price for doing so. That doesn't mean playing catch up after the event. We need some inducement and only the packer and retailer can give us that. Failure to do so will ultimately be to everyone's disadvantage.

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Recently I have been visited by a man from Ireland who is selling a product to control red mite. It is made from various plant extracts and is added to the drinking water. It claims to make the chicken blood unpalatable and thus controls the number of mite. The cost per crop is about 7p per hen. Does it work? I don't know, but it is certainly worth considering. It has been used in France, Italy and Switzerland for some years and also recently in Ireland. I understand that trials in this country will be undertaken shortly. The V.M.D. has stated that it can be marketed as a non medicinal product. It is called RED MIGHT AVIAN. The jury is out at present but I suspect that if it works we will all want it!

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