The UK egg market has run into oversupply, with Central Egg Agency saying it is "swamped" and struggling to find buyers for medium and small sizes.
Egg industry leaders have been warning for some time that the market could run into surplus.
In May, British Free Range Egg Producers Association (BFREPA) chief executive Robert Gooch expressed concern about the rapid expansion of free range egg production.
It follows the release of figures which shows that supplies increased by more than 10 per cent again last year.
Final quarter packing station figures for 2017 showed that supplies of free range eggs increased by 7.6 per cent in the three months from October to December compared with the same time the previous year.
For the whole of 2017, free range supplies were up by 10.25 per cent compared with 2016.
"We have been concerned for the last couple of years," said Mr Gooch. "Numbers have been increasing by 10 per cent each year whilst consumption has been increasing by just five per cent. Expansion is double the rate we need."
"It means we are looking at an oversupply situation as soon as the impact of fipronil in Europe is over."
Millions of layer hens were slaughtered across the channel when they were found to have been treated with a red mite product containing fipronil - a banned substance.
Mr Gooch said the culling of birds had tightened the European market and helped UK producers avoid oversupply so far.
But he said he was concerned about what may lay ahead for British free range egg producers. "We may have been in a different position if it had not been for fipronil. We are very concerned and we have been for some time," he said.
'Swamped'
Now, Andy Crossland, trading manager at Central Egg Agency, says he is "swamped" with eggs and struggling to find a home for many of them.
"The market is not in a good place at the moment," he said, "We can move the bigger grades - very large and large are trading OK at reasonable levels, but the amount of stuff coming through recently has swamped the market. We are struggling to shift it.
"Even processors are closing their doors," said Mr Crossland. "One processor I spoke to has more than 100,000 cases of just small free range in store - that's not counting the other grades."
Asked how it was impacting prices, he said, "the first problem is just finding a home for it."
Mr Crossland said he was finding he could shift very large eggs, which were fetching £1.35 at the moment.
He said retailers seemed to almost have an obsession with large eggs, and this was one issue that the egg industry needed to address.
"Retailers are looking far too much for large eggs," he said. "We are producing far more medium than large eggs, but selling more large than medium. The industry needs to be putting pressure on retailers because it is an issue."
'Demand is not fantastic'
He said that, large and very large eggs aside, Central Egg Agency was selling free range at the same price as colony cage eggs.
Medium eggs were fetching as little as 50 pence - the same as colony; smalls were going or 45 pence - again, the same as colony. "There is no separate wholesale free range market."
Mr Crossland said the national layer flock was now at 40 million birds and more production was coming.
"There is a suggestion that some of it is going up without a contract in place. Yes, we are going to need it in the future but at the moment we have a problem.
"It is summer, so demand is not fantastic at the moment. That makes the figures look worse, but we are struggling to find a home for the egg."
He suggested that the problem in the market may well have surfaced last year had it not been for the fipronil scandal on the continent.
