Egg producers are boasting about the sector’s growth as confidence grows

Egg producers have welcomed the recovery in the sector, with production now returning to levels not seen since the start of the egg supply crisis in 2022, helped by higher wholesale and shelf prices, lower production costs and longer retail contracts.

According to data prepared by the consulting company ADAS for the British Free-Range Egg Producers Association, the size of the national free-range hen flock was approximately 27.6 million hens in May, which is slightly less than the 27.7 million recorded in spring 2022 and more than 1 .5 million birds more than last year at this time.

Meanwhile, the average wholesale price for free-range eggs reached 151.4p per dozen this month, an 8.1% increase on last May’s price of 140p per dozen. This figure is 61.8% higher than in May 2022, just before the sector plunged into a supply crisis as many producers either left the sector or cut production due to falling profits.

BFREPA data also showed that the production cost of just under 130p per dozen had fallen by around 7% since its peak in October 2022. However, the sector’s total production capacity of around 45 million birds was well above current production levels, pointing to greater growth potential.

Meanwhile, average retail prices – a key point of concern in the run-up to the crisis – have also risen significantly, with Assosia’s analysis of data for The Grocer showing the average cost of a pack of six eggs increased by 8.5% to £3.13 in the period from January 16, 2023 to January 11, 2024, with an increase of 9.4% under private label.

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“Over the last few years, the UK egg sector has faced unprecedented challenges from increased cost pressures and low profits, compounded by the impact of bird flu,” said Gary Ford, chief executive of the British Egg Industry Council.

“However, by working closely with retailers, we have started to see hen numbers increase as cost pressures ease and profits improve, leading to increased confidence among egg producers in both the short and medium term.”

Ford explained that the sector was also boosted by fewer cases of bird flu in the winter and greater availability of insurance.

This follows the release of data from the NFU’s annual trust survey earlier this month, which revealed that the egg sector was the only sector to record positive trust levels, with particularly high short-term safety scores.

“Despite a difficult few years for egg producers, recent months have seen fewer cases of bird flu, strong demand for British eggs and, following the NFU campaign, a government review of integrity in the supply chain,” said James Mottershead, NFU Poultry Board Chair. “This has led to increased confidence in the egg sector in the short term.

“It all starts with the farmer and if they don’t generate positivity it has a knock-on effect across the sector,” said Rebecca Tonks, chief executive of Cornish egg company St Ewe, which is why it has focused on ensuring farmers are “supported and happy ” – she added.

Development will continue, but challenges lie ahead

BEIC said it has also seen continued year-on-year growth in retail egg sales volumes since the turn of the year and anticipates that UK egg numbers will continue to increase slowly, further supporting availability.

“But planning consent barriers prevent the industry from increasing capacity as quickly as it would like, which is why BEIC continues to lobby the government for a planning system that works for the egg sector and benefits consumers,” Ford said.

Read more: What in the new NFU survey worries farmers most as business confidence declines?

St Ewe’s Tonks also raised other issues, including the impact of severe weather on seed intended for feed and fears of a mutant strain of bird flu emerging at the end of the year.

“This means difficult decisions for farmers, so maintaining confidence in the agricultural sector is crucial,” she added.

The warnings were echoed by the NFU as a recent production survey found that almost a quarter of egg producers are unlikely or unsure whether they will continue to produce eggs after 2025.

“To ensure long-term trust, the government must continue to work to ensure that risks and benefits are shared fairly across the supply chain,” Mottershead said.

Robert Gooch leaves the sector

This comes after BFREPA chief Robert Gooch, who led the organization for 13 years and was its prominent advocate during the crisis, left the organization.

“He has helped the association address challenges such as bird flu and retailers moving to cage-free egg production,” said BFREPA chairman James Baxter.

“Robert helped BFREPA become the UK’s leading producers’ association as the free-range egg sector was growing rapidly and needed representation at the highest level. We wish Robert much success in the future.”