Egg-price increase alert!
Do you love eggs? Expect an increase in egg prices due to the shortage of eggs on the market. Details here:
The past year was very challenging for egg producers, the South African Poultry Association said in a statement.
According to Dr Charlotte Nkuna, senior executive of the Association, farmers saw feed price increases of a minimum of R1 000 per ton between January and August 2016 due to the drought.
“At the same time, between January and April 2016, egg prices dropped substantially as a result of excess eggs on the market. It was very difficult for the farmers to cope with the high feed prices and the low market prices for eggs.
“The farmers were unable to recover any of the losses suffered as a result of the increase in the price of feed. This hardship resulted in the exit of many of the small-scale farmers – those with a hen capacity of between 5 000 and 40 000. Some of the farmers depleted their flocks early, moving the average depletion age from 74,8 weeks in 2015 to 71,8 weeks in 2016.
“The above factors have resulted in a shortage of eggs. The consumers can expect an increase in egg prices due to this shortage on the market. Indications are that prices are likely to increase on average by about seven and eight per cent. This scenario is likely to persist while farmers attempt to increase their production to meet the market demand.”
In summary, reasons for the current trend include:
• Commercial egg producers not being immune to the input cost pressures endured by the broiler industry
• A number of producers not being able to replenish laying hens at the end of their productive cycle or having had to cull early to raise funds so as to be able to meet commitments to creditors, all as a result of extremely low profit margins
• An acute shortage of eggs following an almost year-long decline in the size of the productive laying flock and associated numbers of eggs produced
She said eggs remain the cheapest and most complete form of animal protein available. As competing protein sources have increased in price, there has been a migration to the consumption of eggs, exacerbating the increase in demand.
The current trend is not viewed as short term/ seasonal but more medium term in nature, and should prevail until the latter part of 2017 at least.
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