FURTHER FREE range egg expansion could lead to 'significant' oversupply in the market, producers have warned – driving down the price paid to farmers.

Free range production in the UK has increased by 14% since 2017 to nearly 25 million hens, a report by agricultural consultancy ADAS confirms.

The independent report looked at the impact of supermarket chains and retailers cage-free 2025 commitments.

It forecasted that a 2% increase in bird numbers was needed to deliver an additional 300,000 cases of free range eggs by 2025.

The British Free Range Egg Producers Association has cautioned that increased production would create a situation of oversupply and reduce the price paid to farmers, which they say has 'diminished' and was now 20% lower than it was five years ago. Data from ADAS also revealed that most free range egg producers are not breaking even.

BFREPA CEO Robert Gooch said: “There is an incorrect assumption from many in the sector that retailers moving away from colony eggs will lead to a surge in demand for free range. That is simply not the case, and this report confirms that.

“The trend is clear; as production has increased, the price paid to farmers has decreased. This situation is unnecessary and unsustainable.”

As well as existing producers expanding, BFREPA has seen new producers entering the sector, often encouraged by new contract bonuses which have been reportedly disappeared over time.

A model contract was made available to all free range egg producers last year to help secure sustainable prices for the long term.

And to help producers understand the market better BFREPA has launched a new online Costings Portal allowing farmers to enter flock data and egg prices to compare their situation with others across the UK and Northern Ireland.

Mr Gooch continued: “Our data from ADAS shows a break-even price of £1.01 per dozen, but our members are submitting prices through our portal which show that they are being paid significantly less than that – about 88p per dozen on average.

“There is a huge range of producer prices in the market, ranging from below the cost of production to good prices to tempt new entrants in to the sector.

“Given this variability, this portal provides the sector with some transparency about what is happening in the supply chain, particularly for retailers who will be able to see if the cost of production price increases given to packers are being passed down to contracted producers.”

The Costings Portal is available at www.theranger.co.uk.