Outlook 2025: Deadline nears for cage-free eggs pledge

The 2025 deadline set by several retailers in 2016 to allow for a comprehensive transition to cage-free egg production is fast approaching, but significant uncertainty remains as to whether this commitment can be met, say consultants Victoria Moxham and Edward Calcott.

The volume of free-range eggs sold in the UK continues to grow, up 7.8% in the past 12 months.

While free-range eggs accounted for 67% of the 249m dozen eggs produced for human consumption during the second quarter of 2024, colony eggs still accounted for 22%.

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In addition, the British Egg Industry Council (BEIC) last year predicted that the national flock size would rise to 40m by January 2025.

About 4.5m birds are anticipated to remain in enriched colony systems, which is not in keeping with the commitment set by retailers Aldi, Asda, Iceland, Lidl, Morrisons and Tesco.

Co-op, M&S, Sainsbury’s and Waitrose had already established their own production standards.

Most notably, Waitrose has not sold eggs from caged hens since 2001, while M&S has had a 100% free-range egg policy for whole eggs since 1997 and processed eggs since 2002.

As the 2025 deadline approaches, German supermarket Lidl has announced a significant investment over five years into free-range egg production, following a 34% increase in its free-range egg sales over the past year.

Lidl seeks new producers

The aim is to support existing farmers and encourage and facilitate the entry of new producers into the sector.

Lidl has established its own producer group in its quest to stock exclusively British free-range eggs and to overcome the producer shortage.

Whether Lidl’s investment will sway the production/flock figures, and perhaps be the final straw for the colony egg, remains to be seen. According to the BEIC projections, perhaps not.

No official start date in 2025 has been publicised for when the cage free production commitments are supposed to commence.

Nor has there been any clarification regarding the inclusion or (more realistically) exclusion of processed eggs in the commitment.

The public scrutiny that supermarkets will undoubtedly face in 2025 if they are not seen to uphold the cage-free commitment might be the final push needed to decide the fate of caged egg production.

Strong prospects for egg sector

More generally, the prospects for the egg industry look to be strong for 2025, with supply and demand in fine balance and prices at levels not seen for some years.

This provides an opportunity for producers to not only recover past losses, but also begin to build a cash buffer, to accelerate debt repayment, invest in new infrastructure and further improve performance efficiency.

Broiler sector changes

The broiler sector is also on the cusp of change.

All major retailers, with the exception of Asda at the time of writing, have committed to the voluntary initiative of reduced stocking densities from the Red Tractor standard of 38kg/sq m to 30kg/sq m.

For the integrated supply chain, this represents a 20% reduction in chick placings. This brings good enrichment and welfare benefits for the chickens, which can be portrayed to the consumer.

Surprisingly, this does not affect the carbon footprint per kilogram of meat produced, because the birds achieve better growth rates and rejects and mortality are reduced, meaning more saleable birds being processed as a percentage of those placed.

The independent retail sector is yet to make a move to reduced stocking.

More total floor area for growing chickens is required to meet UK broiler chicken demand from domestic production.

This is not happening at present. Issues with planning permission and environmental permitting are making the process difficult, costly and time-consuming.

This is most notable in Herefordshire and Powys, where phosphate levels in the River Wye are causing public concern, although not all of this is directly attributable to poultry farming.

The cost of investing in new broiler facilities has risen dramatically over the past five years.

There is no longer any benefit from installing Renewable Heat Incentive payment-driven heat sources, which had supplemented the income from growing chickens alone.

Now, farmers must rely solely on chicken sales to support future investment. That assumes that imports are not used to plug the supply/demand gap, but more to balance the carcass.

When combined with higher interest rates, investment in broiler sheds and negotiations of contracts will need to be carefully considered.