UK retail egg sales have hit £1bn for the first time, but free-range producers are yet to reap the benefits, with farmgate prices dropping by almost 18% since 2015.
Grocery sales of shell eggs hit £1,003,873,346 last month, up 6.3% year on year [Nielsen 52 w/e 21 April]. At the same time, volume sales hit an all-time high of 6.6 billion eggs [Kantar Worldpanel 52 w/e 25 March].
Happy Egg Co owner Noble Foods said eggs were “on trend”, with shoppers seeking more high-welfare eggs in particular. Free-range volumes are up 6.1% and organic up 9% on 2017 levels [Kantar].
However, price pressure from packers and Brexit-linked increases in feed costs were now pushing some smaller producers out of the industry, warned British Free Range Egg Producers Association CEO Robert Gooch.
The free-range egg sector was seeing a “gradual erosion” in value, Gooch warned, with average UK farmgate prices falling from 100.6p per dozen during the first quarter of 2015 to 82.7p per dozen for the first quarter of 2018 [Defra].
“There is a lot of competition between packers for supermarket business, and this is now feeding through to suppliers,” he added. “Many smaller producers, some of which are sole traders, are leaving because of the price pressure.”
Retailers could help by insisting packers pass on the benefits of feed-linked contracts to suppliers, Gooch suggested. “A lot of supermarkets give their packers these contracts, which help smooth out feed price volatility.”
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