Wholesale prices for eggs have soared across Europe over the past year, as producers prepared to comply with the new ban on battery cages and the market recovered from the dioxin scare in Germany.
Prices for liquid egg and shell eggs for breaking - which are used in manufacturing and foodservice - have risen particularly sharply. The EU price for whole pasteurised liquid egg has shot up 102% year-on-year, from €0.65/kg in January 2011 to €1.30/kg this month, and shell eggs for breaking are up 83%, from €0.58/kg to €1.05/kg [Mintec].
Shell eggs intended for the retail market have also increased, although less dramatically. For example, the EU price for medium shell eggs - which is also a good indicator for wholesale prices in the UK - has risen by 23% year-on-year, from €106.87/100kg to €131.69/100kg [Mintec].
Mintec analyst Robert Miles said that although wholesale egg prices had risen, the hikes should be seen against a backdrop of prices that had been exceptionally low during much of 2011.
“The fall last year was mainly due to overproduction in preparation for the ban on battery cages and the dioxin scare in Germany, which caused demand in Germany and the surrounding countries to fall temporarily,” he said.
This was echoed by one liquid egg importer, who said he had seen liquid egg prices go up by about a third since July 2011.
“The new cage regulations were coming in, so production costs were going up,” he said. “Prices were also previously low because of oversupply into the market, and some of that oversupply has now come out of the market.”
The EU brought in new rules banning battery cages this week. In the UK alone, producers have invested £400m in complying.
However, although wholesale prices have risen, retail prices for shell eggs have remained relatively stable, with prices on many lines actually falling. For example, a pack of six budget eggs has dropped from an average of 92p to 74p across the big four over the past year, while a pack of own-label free-range eggs is down from an average of £1.67 to £1.50 [BrandView.co.uk].
Liquid egg and shell eggs for breaking had been affected more than shell eggs sold in supermarkets, as more of them had previously been produced in the battery system, said Miles.
The liquid egg importer said that, in addition, shell eggs sold in supermarkets were typically produced to long-term contracts, meaning prices were more typically affected by costs in production rather than fluctuations in supply and demand.
Cost of production is likely to remain front of mind for all egg producers throughout 2012.
“It’s worth remembering that feed prices remain an issue - although prices for feed have come down a lot in 2011, they are still well up historically,” said Miles. “It’s not cheap to produce an egg at the moment.”