24 November 2017 | Online since 2003

14 March 2017

Egg prices down 12% year-on-year


Egg prices plummeted by 12 per cent year-on-year in the final quarter of 2016, according to statistics released by the Department for Environment, Food and Rural Affairs (Defra).

The latest United Kingdom Egg Statistics release shows that farm gate prices in the three months to the end of December 2016 were up by two per cent on the previous quarter. However, the average farm gate price of 71.4 pence per dozen in the final quarter of 2016 was 12 per cent down on the same period in 2016. For the whole year, the average price was down by 14 per cent compared with 2015 - from 82.1 to 71 pence per dozen.

Robert Gooch, chief executive of the British Free Range Egg Producers' Association (BFREPA) said he was worried about the severe drop in prices producers were receiving for their eggs, "It is a big concern. When the prices first started dropping feed prices were quite low. But now feed prices have been rising while egg prices are still down."

Free range egg prices suffered particularly big falls, according to the release, with the average farm gate price down from 98 pence per dozen in the last three months of 2015 to 83.2 pence per dozen in the final quarter of 2016 - a fall of 15.1 pence year-on-year. For the full year, the free range price was down by 14.7 per cent - from 98.8 pence in 2015 to 84.3 pence in 2016. The average farm gate price for cage eggs fell from 63 pence per dozen in the final quarter of 2015 to 54.5 pence per dozen in the last three months of 2016 - down 13.5 per cent. For the year as a whole, the cage price was down 14.98 per cent from 64.1 pence to 54.5 pence.

The severe reductions in producer prices came in a year when the free range egg market ran into oversupply. Last summer free range eggs were trading for as little as 40 pence per dozen on the wholesale market as supply outstripped demand. This was despite continuously growing demand from consumers for free range eggs.

Eggsell managing director Tom Elliott said last summer that expansion in production had caused surpluses. “It’s gone massive,” he said. “We have seen some massive expansion. There is too much free range around. The market doesn’t need it and want it,” said Tom, who said that the free range sector was facing a difficult period. Central Egg Agency said at the time it was struggling to find a market for small eggs, in particular.

After the latest Defra statistics were released, Barry Jackson, now managing director of egg processor Bumble Hole Foods, said that the farm gate prices reflected supply and demand over the last year. "There were more eggs available last year, for whatever reason," said Barry. Demand had not kept pace with the volume of egg available.

The change in the market - 2015 had remained pretty tight throughout, ensuring that producer prices were held up - brought a series of price cuts from retailers and the packers supplying them, as supermarket groups embarked on a severe price war to try to halt the rise of the discounters. Free range eggs were being sold for less than 80 pence a dozen in some supermarket chains.

The Defra figures illustrate the full extent of the price cuts imposed over the year. The farm gate statistics show that prices were down year-on-year in every quarter compared with the year before. From January to March prices were down by 13 per cent year-on-year, the second and third quarters each returned a 15 per cent fall and the final quarter was down 12 per cent - resulting in a 14 per cent reduction for the full year.

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