2 June 2016
Bill Broody - June 2016
Robert Gooch, our Director of Policy, predicted a few years ago at the BFREPA AGM and Conference that free range may shortly account for 70% of egg production in the UK, but the prediction may prove to be not too far from the truth - despite dissenting voices and even a few giggles from the delegates. In actual fact, recent news articles lead many to think that his prediction may have fallen short and that free range production may wipe out that of other production systems in as little as 10 years.
Tom Willings paper to a forum at the Pig and Poultry Fair in which he prophesises the decline of colony, and the rise of alternative production systems – that means free range in the UK - may appear to some a green light for a cavalry charge of new production with 32,000 or 64,000 size units, which no longer surprises any as the norm. Expansion galore!!! No holds barred. After all, Walmart owners of ASDA, and now ALDI, have given 2025 as the date in which they say that they will no longer accept caged egg and you can guarantee others will follow. No redressing of the word caged accepted – caged means colony, it also means enriched. We can bemoan the short honeymoon colony appears to have had. It quickly became the uninvited guest at the party and an expensive one for the farmers who have invested millions to convert their systems. If you asked the caged producers who converted from cage to colony if, with hindsight they would have done the same I suspect the answer would have been to convert to barn and cascade down if needed. Although that would assume that the UK consumer will finally understand what barn is.
Many producers have long advocated that a value egg is needed in order to save free range as a premium egg. So the death of colony could easily be followed by the decline of the free range premium in which free range egg will become just plain old egg, differentiated only by the county in which it was laid, or the flock size, the colours of the feathers or the extra grain of corn in the feed or even as I read in a local newspaper, the astro calendar. We are entering a whole new era for egg production. The standard – free range!
In the USA, the news from Walmart and a growing band of other big name retailers, means an increase in barn production beyond that which the USA egg authorities have predicted is feasible, together with a steady rise in free range production. (Just remember that the stocking density of US barns is actually worse than the UK stocking density in our old cage units, let alone the improved stocking density of modern UK colonies, and that is before we consider the `standards’ of their `free range’ – there is no comparison!) Over the next 10 years the good ole US of A will be the land of milk and honey for UK machinery dealers keen to expand their operations and spread the knowledge gained as a result of over 25 years of UK free range egg production.
In the UK, despite Sainsbury’s turning to barn as the value egg some years ago, barn has still been losing market share. Yet barn is the last bastion against free range becoming a victim of its own success.
Colony has hit the bottom with prices of 38p for medium and 42 pence for large, well below the cost of production. Colony producers have addressed this by taking up to one million birds out of production, one advantage of colony over free range, an agreement with 10 people covers the bulk of colony production, not quite the same with 1500+ free range producers! It doesn’t need a long memory to recollect when free range producers were also below the cost of production.
Free range is bucking the trend for UK farming. Beef, sheep and pig farmers are already experiencing the inevitable future for egg producers unless we can address the surge to free range production or the consequences of devaluing free range as a premium offer to becoming the value offer. The trouble is free range production is much more costly than colony and barn, and retailers cannot, no must not push free range prices down to the level of colony.
I doubt we will be able to stop enterprising farmers keen to spread their risks from looking at the advantages of free range, especially when they percieve better profits on offer compared with their current offerings, even after the recent price decreases. I met one such beef farmer at the Pig and Poultry Fair - fed up of the low returns on his beef cattle and keen to add 64,000 free range hens. How and when did that happen? I seem to have shut my eyes for a few minutes and all of a sudden new entrants are talking of 64,000 }} birds as the entry level. It was 16,000 a few months ago, 8,000 a few years ago and now we seem to have bypassed 32,000 faster than the demise of white egg production.
How low the free range price is pushed in the future will depend on the size of the flock the public acquiesce before they decry that size departs from the ethos of free range and is an extension of caged production. The larger the size of the individual flocks can only spell trouble for smaller producers, even those with 16,000 birds, as the supermarkets benchmark their costings according to the most profitable producers, which always seems to mean larger. The supermarkets must remember that in order to fulfil their requirements to fill their shelves with the products farmed the way their customers demand free range needs to remain profitable. Investment to keep up with demand requires producers to spend millions of pounds which must be rewarded by consistent and sustainable profits. Anything less will stop the investment and the appetite to fulfil a promise which increasingly looks insurmountable in the timescale given.
Colony was doomed from the start (post 2012). It was never going to be a Marathon to Snickers, or Jif to Cif success, the question now is whether barn is earmarked for the same attention once the colony cages are assigned to export? I hope not! Free range producers need a resurgence of barn! We need barn to replace colony – if, and I stress if, we are seeing the beginning of the end of colony in shell egg. I have long advocated that free range and barn production could work together, in fact it should work together, or within the next 10 years when production has grown to catch up with the decline in colony we will all be at the mercy of the supermarkets – and we don’t need a crystal ball to work out what happens next!