Shropshire's egg producers facing tough times

In the second of his week-long series of features on the farming industry, Andy Richardson takes a look at the county's egg producers and how they are faring in the current tough economic climate

Egg producers in Shropshire face a tough year ahead because of increased competition, higher energy prices and a raft of Euro red tape.

One Shropshire egg producer has had to invest £20 million to comply with stringent new rules from the EU – even though 13 EU members have failed to comply with the rules.

Oaklands Farm Eggs, which is based at Ellerdine and has close links to Harper Adams College, at Newport, had to buy new 'colony cages' to comply with Euro laws.

Spokeswoman Sue Mintz said: "We are the largest producers of economy eggs in the world. We have 1.5 million hens on site at Wem and millions of hens in Swindon. We are also looking at a site in north Devon.

"The company supports about 42 free range and organic producers that supply that part of business and we invested £1 million into Harper Adams."

Ms Mintz said egg producers were in a tough market because of new EU legislation for caged hens.

She said: "People have been working towards compliance for a couple of years. By January 1 we are no longer allowed to keep hens in a conventional cage. We have to use a new colony system, which in our case has meant investment of £20 million.

"The hen colonies might be 10-strong or 80-strong."

Ms Mintz said a number of egg producers had gone out of business because they could not afford to invest to meet the new criteria.

And there was anger in the industry because 13 EU member countries had not complied with the ruling.

She added: "A lot of poultry farms have gone out of business. The colony cages have to have nest boxes, scratching pads, perches and so on. The legislation protects the welfare of hens, but 13 EU members have not complied. That leaves the UK open to the danger of cheaper imports from other parts of the EU.

"It will be up to our border patrols to turn those eggs away. However, it will be very difficult to stop imports of foods that contain egg products. The regulations are a real mess."

Ms Mintz added that poultry producers had been hit by higher fuel, feed and energy bills. There was also increased competition in the sector because a higher number of producers were selling free range eggs.

She said: "We have 19 articulated lorries and the cost implications from increased fuel have been quite great. The excess of free range eggs that have come through the market have driven the price down too, because free range are no longer seen as being a premium product – they are now a value item."

Jeremy Lowe, the NFU poultry adviser, based at Telford, added that energy prices were one of the sector's biggest challenges.

She said: "Life in the eggs sector has been far from rosy in 2011.

"Due to the high price of energy, growers have invested heavily in new technology to reduce costs and do their bit for sustainability. Many wind and solar projects have been completed in Shropshire along with heat exchangers and bio-mass boilers to provide electricity and heat to poultry sites.

"This is investment by the producer for the future must not be allowed to be pinched by the retailer."

Ms Lowe said over production, particularly in the rapidly expanded free range sector, had led to drastically reduced egg prices.

"High feed costs have compounded the problems.

"The caged egg sector is also just completing a £400 million investment to comply with the 1 January deadline for the complete ban on traditional cages under the EU's Welfare of Laying Hens Directive.

"Only 13 countries will comply by the deadline but the EU seems remarkably relaxed about how they intend to police the trade in illegal eggs and egg products despite intensive lobbying at home and in Brussels for a ban on intercommunity trade.

"While the Government has repeatedly pledged its support for the industry, it cannot prohibit the use of illegal egg products and food manufactured from such products."

Ms Lowe added that the NFU wanted to see retailers and food manufacturers showing their support for the whole of the British egg industry by offering a fair price for all legal eggs and egg products.

She said such a tactic would recognise the investment that had been made in all production systems in readiness for the January deadline.

She said: "Our egg industry should not be disadvantaged for embracing new higher welfare systems and we will work for Shropshire producers to support them and their investment and push Government and others further on this issue."