Egg prices dropping again.

[Daniel]

Its was not too long ago you built a new shed for 32000 which you produced as a brilliant thread on here

2015/16, time flies!

But that was our second shed having built the first in 2004, the market was buoyant and we knew what we were doing, with a responsible packer and knowing our costings to the penny.

Since then there has been a gold rush as prices have dropped and build prices, feed prices and every other cost has risen.

Which leads me to conclude that the majority are new producers who either think it’s easy money for not much effort (not true, it takes daily attention to detail 365 days a year).

Or alternatively they have been given figures by a packer which over state production figures and understate costs, added to which, since planning went in for a lot of these sheds, egg prices have been cut heavily.

Feed trackers have added to the chaos, as they’ve been offered to new producers to make out it’s a win:win game, in the same way Sky TV offer the best deals to new customers. Unfortunately the feed trackers have removed the link between supply and demand, so where the egg price would have been cut sooner and more gently to limit production, as feed costs have risen so feed tracker egg prices have risen, and thus production has risen.

Now there is a big oversupply, and the retailers are renegotiating the feed trackers this summer (I believe they were 3 year deals), so I expect blood on the walls, as the feed trackers get renegotiated down to current market prices.

 

[Grassman]

Be a lot better buying a few houses and let them out. Less work. Less risk.
And the asset goes up not down

 

[t murrr]

only problem I see really is when all supermarkets stop cage, barn isn't known much in NI, will people be able to afford free ranch. cage is still a big seller on price. will they only stop selling it under their own brand perhaps or does the market make it illegal for cage after the date.

I would say the catering market is probly a big buyer of cage eggs too which people don't think of, plus liquid, powdered etc.

will a cheaper free range option be a better seller, will people care if the standard of bird life isn't as high but the box still says free range. possibly Sainsbury will show the way in 12-14 months when the cheaper range starts.

perhaps Tesco/asda might move to barn after cage, are barn and free range all rspca assured but cage not, possibly a selling point but then it is few years away off and maybe not much cheaper with requards birds per house

I know quite a few in ni doing the free range and are happy enough, but those who were supplying an English firm I think quite few have stopped, price or contract not as good.

 

[t murrr]

Well was talking to someone in the business and he said free range is the only show in town .Profit margins are round 10 ‘12 euro per bird depending on how good you are .Thinking of going in myself only problem think it would cost round 60 euro per bird to get in and that price profit was based on 80 weeks

 

[Daniel]

He’s an idiot who can’t operate a calculator.

 

[Grassman]

Well was talking to someone in the business and he said free range is the only show in town .Profit margins are round 10 ‘12 euro per bird depending on how good you are .Thinking of going in myself only problem think it would cost round 60 euro per bird to get in and that price profit was based on 80 weeks

So a 16 thousand bird shed makes £160 k profit.
Did you actually believe that?

 

[t murrr]

I thought it to good to be true to be honest I worked the figures out and with all payed back bout 35k taking into account bank would need 78k to service the loan and that’s a year now not 80 weeks know the price per dozen large is 1.15 now that’s euro and that fact came from very good source .oh that’s me borrowing 560k and rest coming out of pocket my only issue is was chatting to organic producer 3000 unit and he said tight a 40 recons 60 a bird and him doing a lot of work fencing etc

 

[Daniel]

So a 16 thousand bird shed makes £160 k profit.
Did you actually believe that?

It’s probably based on the Bowler style of financial accounting in which you quote a margin over feed and pullet costs and conveniently forget about finance, labour, water, electric, medical, etc.

Even then it’s still too high!

 

[t murrr]

Yeah you could be right but sure if you drill down into the figures the bank would def need that amount now unsure of cost of electric ,medicine etc I was taking the labour as myself and wife this system was a flat deck too as cost for multi tier are way to high less maintenance in flat deck and no midden needed for dung pullet is 4.50 euro

 

[7610 super q]

I thought it to good to be true to be honest I worked the figures out and with all payed back bout 35k taking into account bank would need 78k to service the loan and that’s a year now not 80 weeks know the price per dozen large is 1.15 now that’s euro and that fact came from very good source .oh that’s me borrowing 560k and rest coming out of pocket my only issue is was chatting to organic producer 3000 unit and he said tight a 40 recons 60 a bird and him doing a lot of work fencing etc

Max 2000 bird units SA organic. We made between £10-20 / bird depending on flock. And that was when times were good........

 

[t murrr]

This organic man said 1000 per month for wife she lifted eggs and 60 euro cost to put up but when I did figures if he borrowed 160000 and put down 20k it would still be tight for her to get this ,10 year p back and any longer than 10 years in a business loan is too long .banks have tightened a bit and 7 year was quoted.A friend of a friend is going into ducks and taking nothing for the 7 years to loan is finished and contracted to put up another after the 7 going on projections .He has 100 ewes and said sure there is work in that anyhow

 

[Yale]

Too many grant aided sheds in Wales??

Tell me,where are these grants?

Sustainable production grant maybe for the larger schemes?

 

[Bones]

Good or bad times,,, if you don't put in a quarter of the money yourself ,then stick to your day job

 

[t murrr]

I think you are right but I think farming in any shape is in your blood or it’s not problem is that the older generations worked for very little and us pretenders to the thrown are not willing or unable to do it and possibly right we are overheads in any venture are scary know one thing sucklers are a waste of time 150 -200 max with no losses

 

[wellingtonfarmer]

Hearing rumours of another price drop- supermarkets have worked out feed is cheaper again now.

 

[Daniel]

Hearing rumours of another price drop- supermarkets have worked out feed is cheaper again now.

Although if you go to any talk by the Tesco head of poultry he’ll happily wax lyrical about a sustainable poultry industry.

It’s just that by sustainable he means maximising profits for his company at the expense of the industry.

 

[Grassman]

Although if you go to any talk by the Tesco head of poultry he’ll happily wax lyrical about a sustainable poultry industry.

It’s just that by sustainable he means maximising profits for his company at the expense of the industry.

They are right in a way. Lots of eggs. Lots of new entrants. Low price eggs. Perfect for the buyers and end users

 

[Daniel]

They are right in a way. Lots of eggs. Lots of new entrants. Low price eggs. Perfect for the buyers and end users

But who handed out all the feed tracker contracts which decoupled supply from demand?

 

[Bones]

How's things out there in the egg world these days.

 

[Frodo2]

How's things out there in the egg world these days.

Awful