18 July 2018 | Online since 2003

9 July 2018

Chairman's Comment - July 2018


It is not yet clear if the recent slump in the inter-packer trading price of free range is as a result of the exceptional warm weather combined with the usual seasonal excesses, or if something more long term is responsible. 

It is not yet clear if the recent slump in the inter-packer trading price of free range is as a result of the exceptional warm weather combined with the usual seasonal excesses, or if something more long term is responsible. 
 
Planning data has highlighted an alarming rate of the expansion of free range bird numbers, but this has been offset to some degree by rising consumption and the insistence by some retailers to buy British -  due in some part to issues on the continent.  Having said this, the free range sector cannot expand faster than the demand for eggs without some consequences, such as falling egg price to larger production units.
 
I continually call for the retailers to let us know their intentions. Morrisons recently announced that they are bringing forward their cage free commitment by three years, which is perfectly acceptable, but not backing that up with an orderly plan is not. Rumours are rife that they will head for a free range shell egg product only. If that is the case, we need to pace expansion not only to fit the deadline, but also to match demand, if it is not their intention, then we are set to over produce. 
The recent problems surrounding Co2 is a great example of how we let the whole supply chain down by not planning ahead.
 
The retailers’ obsession with large and very large eggs means that these grades are still in high demand, but mediums are trading at colony prices, which is unsustainable. 
 
Previous warnings relating to the size of a hens egg have backfired, but I am sure retailers can do more to encourage consumers to buy more small and medium eggs. If Morrisons can turn around their fortunes by selling ‘wonky veg’ they can apply the same thinking to small and medium eggs.
 
I hope the market improves once the weather changes as is the normal cycle of things, but without any clear direction we could just be delaying the inevitable.