Organic feed hits £300 a ton

Organic feed costs have rocketed to a record high of £300 a ton leaving producers facing a major financial crisis.

They are telling packers that they need a price increase on eggs of at least 10p per dozen in order to survive in the sector.

Richard Barton, part of the family that operates the major Grassington Rangers laying and rearing enterprise, has revealed how his company is facing a monster increase of £60 a ton.

"We buy feed on a six monthly basis," he told the Ranger, "and completed our last arrangements in September at around £240 a ton. I am now trying to negotiate a price for the next period and am facing £300 a ton.

"I have phoned all the major compounders and can find no supplies at anything dramatically less. To be honest I’m terrified at what this might mean to our business."

The total cost of the increase to the Grassington business—which farms 50,000 organic layers—will reach £150,000 a year.

A price rise of £5 a ton puts an extra 1.1p on the cost of producing a dozen organic eggs. That means Grassington needs 13p a dozen increase to meet its additional costs.

"We simply cannot cope without a major increase in egg price," said Richard. "Without it we will simply have to stop the job, perhaps revert back to free range."

Behind the crisis lies a shortage of organic wheat which, as reported in the Ranger, has been caused by both a shortfall of organic production in Britain, poor harvests in Europe and a decision by the authorities in Ukraine not to release supplies to the west.

Some compounders have already begun to replace a percentage of the wheat content in diets with maize and others have warned that supplies of feed will simply run out and producers will face losing their organic status.

Now Martin Humphrey, a director of the Winchester based Humphrey Feeds, has told his customers that a new supply of wheat has appeared on the market—at a price.

Mr Humphrey says that between 10-30,000 tons from Kazakhstan will be available in the UK from April. Its route onto the British market has already been approved by the Organic Food Federation.

Mr Humphrey says: "The new supply is expensive, very expensive at over £120 a ton more than the cheapest wheat sold for the 2006/7 season."

Since wheat makes up 60 per cent of a layer diet the massive price hike could put as much as £72 on the price of organic feed.

"Baring a logistical disaster outside our control," says Mr Humphrey, "we have supplies to ensure that our customers maintain their organic status through to the next harvest. However, the price of feed will continue to rise significantly to accommodate the new supplies of this expensive wheat."

BFREPA officials have already met with the packers to discuss the organic feed crisis.

"We had a sympathetic hearing and packers are aware of the urgent need to get more money back to producers," said Association chairman Tom Vesey. "They also know that we are not just talking about two or three pence a dozen—it has got to be a significant amount."

Packers say they are currently in discussion with the retailers regarding organic egg pricing.