Egg packer trials new feed-linked pricing

High-class egg packer Clarence Court has introduced a new pricing structure, linking its monthly producer price to the “basic layers’ ration” quoted in Poultry World.

The Stonegate subsidiary, whose range includes Burford Brown and Cotswold Legbar eggs, wrote to its suppliers in November introducing its new model.

According to the letter, “the egg price will be adjusted to reflect both increasing and decreasing feed price movements, and will be based on a 1p/doz egg price change for every £5/t feed price movement, or part thereof.”

The new policy came into effect in December and, based on a £9/t drop in the Poultry World layers’ ration between September and October, gave rise to a 1.8p/doz drop in the Clarence Court producer price.

The change has prompted an angry response from some contracted suppliers. “This is totally unfair,” said one producer, who asked to remain nameless. “The Poultry World price has no bearing whatsoever to the specialised rations insisted on by Clarence Court. Our feed costs have actually risen by about £30/t since September.”

Patrick Bourns, who keeps about 3,000 Burford Browns and Cotswold Legbars on his farm in Gloucestershire, agreed there should be a closer link to the actual maize-based ration used by Clarence Court.

“Overall, I think it is a good thing to link our egg price to the feed price. I help run a 100,000-bird broiler unit just up the road, and that is what happens there,” he told Poultry World. “But I believe it should be linked to the actual compounders’ price, not the spot price of wheat or soya.

“I only buy my feed once a month, but the spot market can go up or down £10 in a day.”

Stonegate supply base director Chris Ramsey said the new policy had been introduced on a six-month trial basis and was intended to help producers manage their feed price volatility. “We wanted something that was transparent to all, would not be influenced by individual compounders and was simple to understand,” he said.

“Over time, it will reflect the movements in commodity prices which will then come through in feed costs, whichever compounder they buy from.”

He added that January’s egg price would reverse the December decrease, reflecting a £9/t rise in the Poultry World basic layers’ ration.

* Editor’s note: The Poultry World “basic layers’ ration” is based on spot quotes for wheat (ex-farm), soyameal and fishmeal, taken on the same day each month and weighted according to a typical home mixer’s ration. It is intended as a guide to trends in the spot market, rather than a reflection of compounders’ delivered values.