Cost price squeeze reflected in lower egg throughput stats

Volumes of eggs at UK packing stations during the second quarter of 2022 fell by 7m dozens to total 222m dozens.

Throughputs are down 3% compared with the first quarter of 2022 and have dropped back 6.5% compared with the same time last year, despite increases in farmgate egg prices.

UK farmgate egg prices increased by 6.1% compared with the first quarter of 2022 to total 94.8p/dozen. Prices were also 6.9% higher than in the second quarter of the previous year.

See also: Egg shortage warning as producers suffer continuing losses 

Many producers are tied in to three- or five-year contracts, so are compelled to carry on supplying eggs even if the business is making a loss.

Robert Gooch, chief executive of the British Free Range Egg Producers Association (Bfrepa), said the reduction in throughputs during the second quarter of 2022 was as much as expected.

Mr Gooch said: “The reason is because of the long-term contracts producers are tied in to. Many producers can’t get out of those contracts and have to supply regardless of market condition.

“We have warned retailers and packers that producers won’t restock or will be going out of business if the [retail] price rises aren’t fed down the supply chain to producers.”

Bfrepa has been calling for an increase of 40p/dozen in the price paid to producers to offset rises in costs of production since the beginning of the year.

Retail prices have been increasing, but only a small percentage of this increase is being passed on to producers.

Mr Gooch said: “We have seen a 20p increase at retail, but prices paid to producers have only increased by about 4p/dozen.”