Continued uncertainties in the market place for most agricultural produce following that historic Brexit vote have resulted in a huge surge in free range egg production and a situation fast approaching oversupply.

With margins slipping in most red meat sectors, coupled with growing uncertainty for the future, diversification into egg production has been seen as a safe haven for many, with the result that production has increased by 10% every year for the past three years in succession. However, while demand for free range eggs is on the up, consumption has only increased by 5% per year since 2015.

Add to that the increase in feed wheat prices, and those without a fixed contract or feed tracker contract, are already seeing margins squeezed with the fall in wholesale prices.

Figures for the first quarter of this year already show the number of eggs packed in UK packing stations was up 3.8% on the year, with free range being the biggest.

Not surprisingly, free range farm-gate egg prices are already down from 84.3p per dozen in the first quarter of 2017 to 82.7p per dozen in the period from January to March this year. With a lot more free range units in the pipeline, values are expected to fall further in the months ahead as production soars to new levels.

“We have been concerned about the increase in production for the last couple of years,” said Robert Gooch, chief executive of the British Free Range Egg Producers Association, who added that expansion is already double the rate required.

He also pointed out that the situation would have come to light more last year had it not been for the fipronil crisis on the continent where millions of eggs were withdrawn and large numbers of layers culled when birds were found to have been treated for red mite with the banned chemical. This loss of so many layers headed off any immediate threat of oversupply, but flocks have since been replaced in the affected countries.

And, while fipronil has again been found in eggs in Germany and the Netherlands recently, the situation is not thought to be as bad as last year.

More worrying is the fact that applications to construct new units have been colossal over the past year, and are still being received.

Backing up these statements Keith Wild, of The Ranger, said there were applications to house 1.194m hens in England, last November.

Adding to the problem is the fact that grants are still available to put up such buildings in Northern Ireland and Wales, which in November, 2017, saw applications for 1.122 and 517,000 birds, respectively.

Production in Scotland has not increased at the same rate, Mr Wild said, but at 287,000, and a lot more since, the number of free range eggs on the market is increasing fast.

James Baxter, BFREPA chairman, said: “Packers have been encouraging increased egg production without looking at where the market is, or where it is going. What new producers need to ensure is that they either have a fixed contract or a feed linked contract.

“Producers have had to continually produce free range eggs to higher welfare standards. We are now effectively producing a platinum plated product, without any increase in value. I have a feed linked contract and the price I receive for my eggs is more or less the same as it was nine years ago,” he said.