Just over half of British free range and organic egg producers are considering leaving the industry due to crippling costs of production and the refusal of the supermarket giants to increase retail prices.

The news comes despite the fact more than 27m hens will be allowed outside again, on Monday, May 2, due to the reduced risk of avian influenza and the eggs from free range and organic flocks being able to be sold as such.

The British Free Range Egg Producers Association (BFREPA) has welcomed the news, but said egg producers are at breaking point because of soaring costs.

"It's really good news that shoppers will soon have free range eggs available, having previously had to sell them as barn eggs, but lifting the housing order does not solve the crisis facing the sector," said Robert Gooch, chief executive of the association. "It will not remove the huge hikes in energy, transport, feed and labour costs they are experiencing.

“The picture is bleak – a recent survey of our members suggests 51% of free range and organic egg farmers were considering exiting the industry. Even a small number coming out of egg production would lead to egg shortages which we predict will come later this year.”

Backing up these statements, Ted Fox who set up a 60,000 hen unit at St Johns Kirk, Symington, in 2017 said: "We've got one of the better contracts available, which last year averaged 94p per dozen, but if we'd taken up some of the other contracts available we'd be seriously considering the consequences on the business.

"Prices have to got to go up because the way things stand, the egg price doesn't cover the huge increase in prices of the feed, pullets, vet and med, electricity and shed disinfection between flocks."

Mr Fox added his enterprise looks set to lose some serious money this coming year going by future input prices, which have seen electricity values double, while feed costs have skyrocketed from £278 per tonne in 2021 to £420 at present.

Add in a further £20,000 for shed disinfection; £10,000plus on medicines; £25,000 for maintenance and £132,000 on labour (three staff per day, seven days a week) and the business will be in the red in 2022 unless the supermarkets increase the prices paid to the farmer.

He added that the way prices stand at present, his 2022 flock will cost an extra £473,000 plus to keep, due to the rise in the three main inputs – feed, pullets and electricity which are set to rise from £890,000 in 2021 to £1273,00; £284,000 to £320,000 and £40,000 to £80,000, respectively.

"It really makes you think how desperate the situation has turned. Our hen laying business used to produce our best margins, but we'll not have made any money this past year. If there is no increase in the ex-farm price paid for our eggs and input costs continue to rise we will not be putting in an order for another flock at the end of this year," added Mr Fox, whose flock regularly yields 320 eggs per bird.

"Ex-farm prices for free-range eggs have to improve at least 40p per dozen to make ends meet because there were already 2m fewer birds in the system in the first three months of 2022 as farmers stopped ordering pullets for egg production. I've also been told by my processor that there is not the liquid egg coming in from Ukraine, or the eggs being exported from Europe, because of the war," he said.

According to the recent BFREPA survey of its members which saw 139 responses, 51% claimed they are 'seriously considering' leaving their shed empty at the end of their current flock, with 18% undecided. Only 31% said they are not considering leaving.

Read more: Supermarkets 'suffocating' egg producers

Asked how much longer they will continue producing eggs if their egg prices remain the same; 36% said fewer than six months with the same amount saying 6-12months. Some 15% said they would continue producing eggs if the egg price remains the same for 1-2years with 13% for 2+ years.

As a result, BFREPA is campaigning for an increase of at least 40p per dozen to be implemented immediately – 80p per dozen for organic eggs – and has written to the eight major food retailers in the UK to act before businesses go bust.

BFREPA says Tesco, Asda, Morrisons, Sainsbury’s, Aldi, Lidl, Marks and Spencer, and Waitrose are all culpable for the desperate situation, and that they are the only ones in the supply chain which can make a difference.

The organisation has called a Crisis Summit for the national free range and organic flock – about 27.7m, producing more than 8.5bn eggs a year – for May 10, and invited representatives from each retailer to attend to discuss how to resolve the issue.