High demand and reduced supply
“I enjoy making cookies at home. Home-made pastry is a lot yummier than that bought in a supermarket. Just for one reason: it contains no artificial ingredients. I always used to whip a few eggs into the dough, but now I cannot afford them anymore. With Easter around the corner, it is very sad,” complains Veronika Dauguvienė, a Klaipėda resident.
Some residents of the seaport town ponder that the egg price hike just before Easter has to do with supermarket chains’ desire to rake in as much profit from egg sales as possible.
Some residents of the seaport town ponder that the egg price hike just before Easter has to do with supermarket chains’ desire to rake in as much profit from egg sales as possible. Olga Malaškevičienė, spokeswoman for Maxima, agrees that egg prices have gone up. “The approximately 30 percent price hike has been caused by a considerably reduced egg supply, as the largest European poultry farms were not able to adapt them appropriately to the latest EU demands concerning laying hen protection. To summarize the EU policies, a lot more attention is being paid to the well-being of the hens from now on. This EU requirement has proved to be quite hard to follow for many,” Malaškevičienė explained to The Baltic Times.
Hens deserve better treatment
Legislation defining the standards for the protection of laying hens has been in effect since 1999. The then-EU member states agreed then that use of the traditional chicken cages had to be banned from 1 January 2012, and replaced with more modern ones, corresponding to the strict EU animal well-being regulations. Thus new enclosures must even have nesting areas, and perches.
Sweden became the first EU country to have renewed its chicken cages. It put the cage system of rearing up to the European Union standards already in 1999. Luxembourg took care of the business in 2007. Austria in 2009 and Germany in 2010. Only a few EU countries, Poland and Great Britain included, have put off the improvements until the turn of the year. Lithuanian poultry farms had nearly completed the work before 2012.
Interestingly, recent Euro barometer research revealed that more than half of surveyed European egg buyers would agree to pay more for eggs laid in the improved chicken cages.
Lithuanian advantage over Poles
With the disruptions in supply, the Maxima spokeswoman says, the Lithuanian egg market has also been shaken up. “The current situation is that we sell only eggs laid in Lithuanian farms. So far Maxima supermarkets do not incur any egg shortage, and the food retailer strives to ensure a continuing egg supply for the Easter table,” Malaškevičienė stressed. She added Maxima does not intend to bring cheaper eggs from abroad, adding that local hen farms say unanimously that the recent rise in egg prices is “extraordinary.”
“In recent years, prices of all provisions have gone up, but the egg price has remained stable. The nearly doubling in price is unusual. Honestly, I do not remember such an egg price increase,” says Nijolė Kavaliauskienė, director of agricultural enterprise Ginkūnų Paukštynas (Ginkūnai poultry farm).
She, however, says the leap in price could have been expected. “As Polish hen growers were behind schedule in implementing the EU animal well-being regulations, Lithuanian farmers sticking to them could not effectively compete with the Poles for the last two years,” the director says.
The nearly doubling in price is unusual. Honestly, I do not remember such an egg price increase.
As most of Lithuania’s poultry farmers have already completed the hen well-being improvements, Kavaliauskienė says, now they are in a better position than the neighbors. “I am receiving inquiries about the availability of our production almost every day. In the last sale agreements we signed quite recently, we earn a bit over 50 cents before taxes. You can guess what the final price will be when the sellers add their mark-ups,” the director said.
In order to agree with the EU requirements, Ginkūnų Paukštynas, she says, has invested 16 million litas into its four hen coops, with the EU financial assistance making up 40 percent.
“It is obvious that the prices will stay high for a while, so the investments should pay off this years,” the director said confidently.
Egg price nearly triples
Girelė Paukštynas (Girelė poultry farm) takes up roughly 10 percent of the Lithuanian egg market. Reimondas Geležius, its director, said to The Baltic Times that he is holding talks with Polish wholesalers over the import of Girelė paukštynas eggs. “Poland has always been the largest egg supplier in the European Union. Now it is experiencing a considerable shortage of the product due to the strict EU animal well-being regulations, as most of its hatcheries have not been rebuilt to the new standards. If the situation continues, Poland will become an egg importer. As most Polish egg hatcheries scramble to satisfy the EU regulations, Lithuanian hen farmers, having met them, have a big advantage in the situation,” Algis Kertenis, commerce director at Girelė, said to The Baltic Times.
“Complying with the EU law and changing the old enclosures with the improved ones, we had slaughtered over 150,000 hens over two weeks. Our output went down nearly 70 percent during the process, but it has nearly bounced back to its previous level,” Kertenis says.
Will egg-related products go up in price?
If the hatchery strikes a deal with Polish food wholesalers, the eggs can become a luxury item on the Easter table, he says. “L-sized eggs cost 17 cents during Easter last year and now cost 45 cents. And I do not add the value-added tax and the mark-ups. Then you have jaw-dropping egg prices,” the commerce director notes.
However, the until recently largest egg hatchery, Vievis Paukštynas (Vievis laying hen farm) has been through tumultuous times – finding itself on the brink of bankruptcy, the farm has been acquired by Kauno Grūdai (Kaunas grain), the largest Lithuanian grain processing enterprise. The bankruptcy procedures are still ongoing, and Vievis Paukštynas still owes around 23 million litas to creditors.
With the prices rising, industry experts hint that a price hike of other products containing eggs will likely be triggered as well.