18 August 2018 | Online since 2003

11 September 2012

Bill Broody - September 2012

This month, the latest DEFRA figures revealed an 18% rise in chick placings on last month and 15% higher than the same time last year! The graph above shows the sharp rise in chick placings in red.

The figures may reflect the fact that new colony units are still coming online, but it is concerning that there are still new Free Range units coming into production. We are told that retailers are resisting providing cost of production increases to farmers for the price of eggs due to the surplus of free range eggs that are available, so it is frustrating to see these chick placing numbers going in the wrong direction.

Some producers are already reducing their bird numbers, in anticipation of 2013 being a difficult year, and some are even talking about taking a `holiday’, but more new entrants will further tip the balance in the wrong direction.

Kantar data suggests that for the first time in well over a decade the free range sector is shrinking (demand for free range eggs is falling), probably under the cosh of double-dip recession, so yet more farmers, with more laying birds is not good news.

How can we ensure that potential new entrants hear the message, cease further investment, at least until the economy picks up, and so does the demand for free range eggs? How do you stop a cash rich arable farmer putting down 16,000 birds for future, spreading the risk of his farm enterprise?

One of the reasons for the increase may be that large units are getting larger as the low egg price forces some producers to seek comfort in ‘scales of economy’. This seemed to be the case on the Farming Today interview with a Welsh farmer who had increased from 16,000 to 32,000 birds. But increasing bird numbers is only a short term solution. Whilst scales of economy will work whilst there are plenty of smaller producers. Once those smaller producers are gone the scales of economy benefits will pass back to the retailer and packer and the farmer will find himself with a bigger loss that is unmanageable.

The figures are particularly surprising as BFREPA costings show that units with less than 16,000 birds are losing in excess of £2 a bird.

To further compound the issue egg sets in hatcheries have also increased by 1.33 million. These figures make it very hard to justify price increases to retailers. The market will determine the price.

On top of all this we have a falling free range market. We are losing market share, for the very first time. Now I am sure that the recession has played a part in this. But you cannot just sit back and let it happen. We need to analyse the reasons why and act to counter them.

One of my theories is that the market has started falling ever since the cage market was banned. Is that just a coincidence? As a consumer I now believe that I can buy any egg on the shelf. Barn eggs are promoted as cage free. It seems everyone is selling eggs under a welfare issue. Do consumers now think that the colony system offers them enough of a welfare benefit to abandon free range. Have caged for the first time got a welfare issue to hang their sales on? If so we need to make sure we tackle the issue. We need to make sure we promote free range and it’s benefits at every opportunity we can. Instead of relying on the BEIC to get press coverage on pancake day we should have our own PR machine making sure that every time egg is mentioned the words ‘free range’ precede it.

BFREPA have a responsibility to promote FREE RANGE egg. The main colony producers just happen to be the larger packers. Would a packer rather sell a colony egg or a free range egg? Would you rather sell something you produce yourself in greater numbers or something you ‘buy in’.

Now you may not agree with some of my theories but we have a duty as a free range association to debate them and we have more of a duty to look after our members the ‘Free Range Producer.’ The cost of appointing a PR company to ‘sing our praises’ will be a lot less than some of the policies BFREPA have passed recently. We need to get press coverage in local papers to promote sales for all members. How about sending free range eggs to all local schools on certain occasions? That would get press coverage in local papers. Just one of many ideas we need to debate.

But we must take action to counter falling sales and as a matter of urgency.