Warning over egg price hike and supply shortfall due to new welfare rules

New rules banning the use of traditional battery cages to produce eggs are scheduled to come into force in January 2012.

From that date it will become illegal to produce eggs from traditional battery cages in the EU. Instead, producers must convert to new 'enriched' cages, which have more space, perches, a scratching area and nest boxes.

Secretary general of the European Egg Processors’ Association (EEPA), Filiep Van Bosstraeten, told FoodNavigator.com that its membership is expecting a hike in egg prices as well as a tightening in supply for, at least, the first six months of 2012 as some older, smaller producers are set to cease production in December this year, citing a lack of finance for the switch to the new style cages.

Reduced capacity ​

Futhermore, egg producers who have converted, or will have done so by next January, will have to remove 20% of their flock, notes Van Bosstraeten, so this reduced capacity, he stressed, will obviously have a negative impact on egg availability.

“In Germany, they imposed the enriched cage regulation in 2010, which has resulted in about 20% less production. That country was already the largest importer of eggs in the EU and its demand for imports is now much higher.”​​

According to the EEPA, 25-30% of total EU egg production is used to supply the food industry with egg products as ingredients for a wide range of food products such as cakes and quiches.

And a report released earlier this month, commissioned by the British Egg Industry Council (BEIC), found that egg producers who have converted to the new enriched colony systems already face an 8% increase in their day-to-day running costs. "But the greatest impact will be on servicing the capital cost, namely interest and depreciation,"​ it adds.

Referring to the number of member states that have said they will not be compliant by January 2012, the BEIC report also warned that egg production in compliant countries should not allowed to be undermined because of a flood of cheap, illegal imports from the non-compliant markets.

Non-compliance ​

Last week, the Commission said it does not intend to postpone the deadline of the ban and it will not hesitate to start, infringement procedures in cases of non-compliance.

But it also claims that the problem is complex as some of the non-complaint egg producer countries are in deep economic crisis. Commissioner for Health and Consumer Policy, John Dalli, recently said: “There must be a political solution to this…What I am pushing to do is to contain any eggs that are not produced according to the new directive within their own territory, usable only for processing.”​

But Dalli remarked that he has to investigate whether this is allowed under EU rules.

And Van Bosstraeten said the EEPA is awaiting the Commission’s final decision on this, due at the end of the week, in order to take some of the guesswork out of the overall egg product supply expectations for next year. “European egg prices will sky rocket if there is not a transition period after January for those non-compliant countries to fully implement the legislation. Furthermore, they will be forced to import from outside the bloc where quality is not always assured,”​ he added.

Seven countries including Belgium, Bulgaria, Cyprus, France, Poland, Romania and Portugal have all said they will not have removed all their cages in time. And Hungary, Italy, Latvia, Spain and Greece have still not disclosed to the EC any data on the extent of cage changeover by their egg producers.

Ultimately, it is the responsibility of each of the member states to enforce the Directive.