British egg farmers are facing an unprecedented upswing in cost to produce eggs, leaving hundreds of farms teetering on bankruptcy.
Costs right across the supply chain – from feed to energy – have been on an upward trend for the past two years, but are now really soaring to never-before-seen levels, thanks to the invasion of Ukraine.
The increase in feed costs is at the forefront, with the Russia/Ukraine conflict adding an additional 25p to 30p per dozen, while the well-reported labour shortage is also playing its part in putting in the punches.
According to British Egg Industry Council (BEIC) data, feed has doubled, energy has risen by 40%, transport costs have seen a 30% increase, packaging is up by 15% and the rise in the UK’s National Minimum Wage has added another 7%.
Tidal wave of cost increases
With British farmers losing money on every egg they produce, many are choosing to stop producing rather than lose their farms. The BEIC said the national flock has already declined by around 4 million hens in the past year.
“The tidal wave of cost increases will see many family farms, some of which have been producing eggs for generations, going under in a matter of days, unless something is done quickly,” said Andrew Joret, chairman of BEIC.
More worryingly though, there are no signs of this tidal wave slowing down, meaning sectors like bakery will unavoidably feel the pinch, and ultimately, costs will be passed down to the consumer.
Maintaining the Lion Code
BEIC research shows Brits want to buy local and until now, have essentially enjoyed an ‘egg holiday’.
“Ten years ago, you might typically have paid £1.35 for 6 medium eggs, which today often cost less than £1 which is a third of the price of a barista coffee. Eggs are one of the most undervalued natural whole foods; packed with protein, vitamins and minerals. They provide the whole family with nutritious meals at a fraction of the cost of some other proteins.
“It is our top priority to keep up the usual supply of British eggs, the majority of which are produced to the world-leading quality and welfare standards set by the Lion Code, which are enjoyed by so many people around the UK every day,” said Joret.
“However, without rapid recognition of the seriousness of the situation, a significant number of British farmers won’t survive to continue to ensure that one of the nation’s favourite home-produced foods is readily available on the table.”
Summary of rising costs
Data supplied by BEIC
- Feed: The cost of feed for egg laying birds is now £400 per tonne, up around 50% over the past two years, and is expected to rise even further with Russia and Ukraine being major exporters of key raw materials used in the feed.
- Pullets: The cost of pullets has risen by 5% over the past month and more than 15% in the past two years.
- Transport: Fuel costs continue to increase at record levels, impacting the whole supply chain, from delivery of feed stuffs right through to the delivery of a box of eggs ready for sale.
- Labour: There are significant labour shortages in a wide range of industry roles; on farm, in packing stations and egg processing plants. This has led to significant wage inflation, which will also increase with the 7% rise in the National Minimum Wage
- Energy: The wholesale cost of gas from suppliers has increased by 250% since the start of 2021 and with Britain generating around a third of its electricity from burning natural gas, electricity costs are also increasing.
- Packaging: Figures from letsrecycle show the cost of recycled paper, which is used for packaging, has increased by 50% in the year to August 2021, while energy costs, a key component of the manufacture of packaging, are also seeing record increases. Prices of egg packs have risen by more than 15% since November 2021.