Egg market - Where is the truth?

[Grass And Grain]

Who wouldn't sign up. They've nothing to lose.

 

[Jimdog1]

BFREPA are very effective at getting media coverage, particularly when you consider their tiny budget vs the NFU, or for that matter the producer associations for Pigs, cattle etc.

The packers never say anything on Telegram, sadly neither do most of the producers!

I am guilty of saying nothing on that feed. My packer is well aware of my views though. They have been very good at creating an oversupply that the supermarkets have taken full advantage of, but they have now mismanaged the situation to the point where they will be short of eggs and the only way to correct the market is to improve our margin dramatically. The current system is broken. How do you see us holding on to a little bit of control so we don't end up in the same position again and again?

 

[Grass And Grain]

Like a union you mean?

Yes, one which actually does something useful.

Not sure, but don't think there's anything illegal about what I've suggested.

It's crazy if the producers to each packer are not in a negotiating group.

Just needs a non-egg producer to actually do it. I mean what they going t do to me if I did it? They can't cancel my contract 'cos I'm not an egg producer.

No-one thought it possible to ever do anything about Red Tractor, as they've got total control, but we've got organised and are giving them some right headaches with now a fair chance of taking their power away.

Problem with these things is it takes massive effort, so no individual does anything about it, this malaise is why the processors win. Everyone is busy feeding hens, mucking out, packing eggs and looking at their negative bank accounts.

Surprising what can be achieved from a keyboard.

 

[delilah]

This (the long term problems not the current mess) will be fixed by the farmers and the packers working to strengthen their position vs the retailers.

So that's what you meant with this post ?

However, if the farmers were to use this situation to change the dynamics of the industry, that could be different.

 

[Grass And Grain]

I am guilty of saying nothing on that feed. My packer is well aware of my views though. They have been very good at creating an oversupply that the supermarkets have taken full advantage of, but they have now mismanaged the situation to the point where they will be short of eggs and the only way to correct the market is to improve our margin dramatically. The current system is broken. How do you see us holding on to a little bit of control so we don't end up in the same position again and again?

When you've set up your new dedicated packer producer group, negotiate price with the packer.

You can't limit supply, because that's illegal. Well, think it depends on how much % of the market you control, not sure of the details.

However, you can ask the packer how much supply the want, and work with them to match your supply with their demand. All at the agreed price.

Make sure the contract let's the suppliers stop supplying if price isn't enough.

Difficulty comes if a producer wants a new shed to produce more, because you're all now making a profit. Who gets the new shed? Would need to think about that one. Not sure how to manage that.

Send an email each month reminding every producer in the country lwhy they are now making stable profit. i.e. don't be silly and leave the producer group for 1p/doz.

 

[delilah]

I know nothing about the egg job beyond the two dozen chucks we have, so I make the following observation from a position of complete ignorance:

You're in cloud cuckoo land if you think primary producers and packers working together will solve anything. The retailers set the terms of trading. Anything that pees them off, they will just hasten the move towards vertically integrated supply chains, ie they own the packer who owns the primary producer. All meaningful change is demand driven. The only way to get a stronger position for the primary producer is by bringing about change at the retail end. Market share is the root of all evil.

 

[Grass And Grain]

I know nothing about the egg job beyond the two dozen chucks we have, so I make the following observation from a position of complete ignorance:

You're in cloud cuckoo land if you think primary producers and packers working together will solve anything. The retailers set the terms of trading. Anything that pees them off, they will just hasten the move towards vertically integrated supply chains, ie they own the packer who owns the primary producer. All meaningful change is demand driven. The only way to get a stronger position for the primary producer is by bringing about change at the retail end. Market share is the root of all evil.

Totally disagree with you on this one Delilah.

Well, what I mean is, there's nothing wrong with what you say, handful of big supermarkets have all the market share. However, we can't change that. We've no chance.

What we can change is the bottom end where there are hundreds or thousands of farmers all being picked off one by one. Take our contract terms or leave them.

Supermarkets need processors, and processors need supermarkets. It's just that it's a true pyramid. Change the shape of this pyramid.

Make it same shape as a skyscraper. Cuboid.

Now we've got our cuboid, the supermarkets need the processor and farmers just as much as farmers needs the supermarkets. Supermarkets need supply.

I've a mate whose spent 20 years as a supermarket buyer. He can't do without the processors or supply of their products. If there's lots of processors to pick from he can negotiate harder and get cheaper prices. If there's not many processors in an industry, or if supermarket needs high capacity processors, then supermarket ends up paying more for the product.

 

[delilah]

However, we can't change that. We've no chance.

Market share is an aberration. It only really became a thing in the '80's, and it is no coincidence that that is when the food chain went tits up for farmers and the environment. Market share will be reversed, it's just a question of whether farmers for once seize the opportunity to be willing partners in a positive movement.

What we can change is the bottom end where there are hundreds or thousands of farmers all being picked off one by one. Take our contract terms or leave them.

If you think that that can be reversed by farmers banding together, then crack on . I've said why its futile.

 

[JockCroft]

Totally disagree with you on this one Delilah.

Well, what I mean is, there's nothing wrong with what you say, handful of big supermarkets have all the market share. However, we can't change that. We've no chance.

What we can change is the bottom end where there are hundreds or thousands of farmers all being picked off one by one. Take our contract terms or leave them.

Supermarkets need processors, and processors need supermarkets. It's just that it's a true pyramid. Change the shape of this pyramid.

Make it same shape as a skyscraper. Cuboid.

Now we've got our cuboid, the supermarkets need the processor and farmers just as much as farmers needs the supermarkets. Supermarkets need supply.

I've a mate whose spent 20 years as a supermarket buyer. He can't do without the processors or supply of their products. If there's lots of processors to pick from he can negotiate harder and get cheaper prices. If there's not many processors in an industry, or if supermarket needs high capacity processors, then supermarket ends up paying more for the product.

As an egg consumer, I find this thread most interesting. Dont buy suppermarket eggs. Buy from local shops, produced by a local small free range farmer. Think last week's dozen large was £3.80. What margin would the shop have had?
Will Eggs be the first staple food to be missing from the shelves? Local shop only had 3 or 4 doz on the shelf when I bought last weeks. Had a look when in Tesco, much smaller shelf space than used to be with maybe 10 or 12 doz actually on the shelf.

Slightly of topic, did I not read somewhere (may not have been about UK) a few months ago, that there was a proposal that there would be rules that would restrict area/numbers of intensive livestock density. Seem to think it said it would be calculated per sq.kilometer and per 10 kilometer sq. so would make some large intensive units so longer functioning. It defo had an example of a 1000 cow dairy and current Dutch problems with pigs.

 

[yellow belly]

Its Totally doable, it's just noone's organised it.

Organise every single producer into their own processor group. Let the groups do their stuff. Simples.

Like a marketing coop of united farmers take out the middle man

 

[Grass And Grain]

Market share is an aberration. It only really became a thing in the '80's, and it is no coincidence that that is when the food chain went tits up for farmers and the environment. Market share will be reversed, it's just a question of whether farmers for once seize the opportunity to be willing partners in a positive movement.



If you think that that can be reversed by farmers banding together, then crack on . I've said why its futile.

I missed that. Why is it futile, or at least difficult? Imports, supermarkets ditch the UK packer and buy total supply from overseas? They could, eggs have a good long shelf life.

 

[delilah]

Why is it futile

The stuff I said in the previous post re vertical integration.

Farmers - and their national representative bodies - have spent the last 40 years blindly following the mantra 'grow or go', only to now be bellyaching about the fact that everyone has gone (pigs, poultry, fruit, veg) or is going (beef, lamb, milk) .

Which means that the cartel have a 40 year head start on any notion that farmers can somehow outwit them in the game that the cartel invented and wrote the rules for.

 

[delilah]

Have a read of the chicken and egg stuff on here.

https://www.ey.com/en_us/consumer-p...ntegration-is-impacting-food-and-agribusiness

You will not beat them at their own game.

 

[Grass And Grain]

Have a read of the chicken and egg stuff on here.

https://www.ey.com/en_us/consumer-p...ntegration-is-impacting-food-and-agribusiness

You will not beat them at their own game.

xxxxxxxxx, for example, are going more and more into pig ownership and paying farmers to be b&b producers. So your comments aren't untrue, but I wouldn't worry about it happening overnight. xxxxxxxxx are pretty big, but they aren't buying farms, as farms are too expensive. Not saying it isn't possible, but I'd imagine supermarkets can't finance owning all their supply chains.

In the meantime, group farmers together to increase their bargaining power. Won't work very well at all with cereals, but works better where farmers are dedicated suppliers to a processor.

What does a farmer have to lose by forming a negotiating group. Nothing to lose, and everything to gain. It would cost peanuts to set up.

 

[Humble Village Farmer]

It's a must or we'll all end up like Amazon workers

 

[Grass And Grain]

Like a marketing coop of united farmers take out the middle man

Sort of, but don't simply form a co-op with your own packing facilities. You'll be competing with other packers, and your co-op could easily lose its contract = end of co-op.

Instead, just be a negotiating group, still supplying a processor. Let the processors risk losing their supermarket customer. If one processor loses their contract, the supplying farmers will still be required (unless cheaper to source from overseas). I'm guessing imported eggs are more expensive, otherwise they'd import the lot.

The main point is group together and you will be able to negotiate better terms than if you're a single producer.

 

[designanddetail]

Someone get onto Clarkson about the egg crisis, he seems to be the only one who can get any media attention in support of agri prices. These 'trade bodies' or unions seem to be hopeless.

 

[Batty]

xxxxxxxxx, for example, are going more and more into pig ownership and paying farmers to be b&b producers. So your comments aren't untrue, but I wouldn't worry about it happening overnight. xxxxxxxxx are pretty big, but they aren't buying farms, as farms are too expensive. Not saying it isn't possible, but I'd imagine supermarkets can't finance owning all their supply chains.

In the meantime, group farmers together to increase their bargaining power. Won't work very well at all with cereals, but works better where farmers are dedicated suppliers to a processor.

What does a farmer have to lose by forming a negotiating group. Nothing to lose, and everything to gain. It would cost peanuts to set up.

Some of the xxxxxxxxx white rose farms pig breeder farms were purchased from a couple of pig farmers including one of the now directors of white rose farms. I believe 100% of xxxxxxxxx chicken is produced in house from crown chicken and 100% of crowns feed is sourced from crown milling this vertical integration is much further down the line than you may realise. Back on topic with eggs but what percent of Morrisons eggs are sourced from packers chipendale owned by Morrisons?

 

[Grass And Grain]

Some of the xxxxxxxxx white rose farms pig breeder farms were purchased from a couple of pig farmers including one of the now directors of white rose farms. I believe 100% of xxxxxxxxx chicken is produced in house from crown chicken and 100% of crowns feed is sourced from crown milling this vertical integration is much further down the line than you may realise. Back on topic with eggs but what percent of Morrisons eggs are sourced from packers chipendale owned by Morrisons?

You know more about xxxxxxxxx than I do, but yes, an example of vertical integration.

I can't think of many reasons how this trend helps farmers, although companies like xxxxxxxxx do need continuity of supply, and do offer B&B contracts. The B&B farmers probably aren't getting rich, but they have a stable and reasonable income for an honest day's work.

Any poultry/egg producers work on a B&B type basis?

I think a good number get driven into B&B production because they've had a belly full of price peaks/troughs.

The concept of being in negotiating groups still stands. Even the B&B producers who "work" for someone like xxxxxxxxx should be in their own negotiating group.

 

[DaveGrohl]

Teresa Coffey says not to worry. And the BRC say it’s just bird flu. T0ssers.