Free-range eggs get a resounding welcome from European consumers

Thursday, June 6, 2013

In-store demand in Europe is supporting free-range egg systems, bringing with it better returns for the producer

by NORMAN DUNN

When the consumer swing to eggs from non-cage systems finally forced a total European Union (EU) ban on the so-called "Eurocage" at the beginning of 2012, northern European producers were already well into alternative systems.

By 2010, the continent's biggest egg exporter, the Netherlands, had spun from 90 per cent Eurocages (550 square centimetres floor space per bird) to less than 30 per cent. By the end of 2012, there were no standard cages left in this country, which exports two thirds of all table eggs it produces. Mind you, around 10 per cent of Dutch eggs are still produced from cages of a sort. But these are so-called "enriched" cages with a minimum 750 square centimetres of floor space per bird plus perches, litter area and nesting boxes.

Despite the improvements, any type of cage now has a poor public image in Europe and so even these "comfort" models are reckoned to have a fairly short life ahead of them. Now, 67 per cent of production comes from on-floor systems in deep litter barns and 23 per cent from housing with outdoor runs for the birds: free-range eggs.

British poultry farmers have reacted even faster to market forces. Even six years before the cage ban, around 28 per cent of eggs there were from free-range systems. Now the share is 53 per cent, with most of the rest coming from deep litter barns.

In Germany, the percentage of free-range production is about the same as in Britain. But these sorts of reactions are mainly in the north. In 2012, Italy still produced around 70 per cent of its eggs from cages, some enriched and some not. So a lot of production there was, and still is, technically illegal. And 97 per cent of the Spanish laying flock was still in cages last year.

Despite the consumer attractions of the free-range approach, barn systems with no outdoor runs are dominant in the countries that are now bidding cages goodbye. These barns feature plenty of perches and nesting boxes. Some 62 per cent of eggs in Germany are now produced in such systems and 67 per cent in the Netherlands.

But the picture of free-range hens contentedly pecking their way through rich pasture in the sunlight has captured the imagination of consumers from Berlin to Basel. This means that in Germany, for instance, the real growth has been in free-range and organic egg production systems (which also require outside access for hens). The increase for both organic and free-range systems was from 19 per cent of all egg production farms of over 3,000 birds in 2005 to just short of 22 per cent of all laying farms in 2011.

But what are the rules for free-range egg production in Europe? Barn space requirements are the same as with barn systems without outside access: that's nine birds per square metre, 15 centimetres of perch space per bird and one nesting box for every seven hens.

Outside, the minimum stocking rate is 1,000 birds per acre, or a hen for every four square metres. But, at this point, current legislation – and there are signs that this will be changed relatively soon – seems to run out of steam. For instance, EU rules just mention that there should be "vegetation" on the outdoor runs. And no government has thought about controlling the size of free-range units.

This has opened the door to some mega-production units that are earning the sort of bad image once reserved for the cage farms. The popular British welfare-based Freedom Food's system steps in here, demanding good grass coverage on outdoor runs and advising rotational stocking on this pasture, as well as requiring a much lower outdoor stocking figure of just 400 birds per acre.

Several organic egg production systems have limited flock size per production unit to 4,000 to 5,000 birds. My experience is that the well-managed free-range layer units usually stick to 2,000 birds or thereabouts. But lately there have been some frightening media revelations of 10,000 birds per unit, and more in some cases. These, and other reports, have turned up "free-range" egg producers breaking a number of production regulations – but never failing to cash in on the better prices.

And the producer returns are certainly higher. At the beginning of this year, farmers with free-range systems were getting the equivalent of C$1.58 for a dozen large eggs, and $2.15 a dozen if they came from an organic system. Those who have stuck with the cage systems – albeit "enriched" with perches, etc. – may have invested the most in housing. But, just now, they are only getting an average $1.18 for 12 large eggs.

Just to get a handle on these returns, average cost of production (2010-11) according to the Centre for Rural Business Research in the U.K. was the equivalent of $1.39 a dozen for free-range and, for barn perch systems, $0.99 a dozen.

Going by these figures, which are still fairly relevant, free-range production in Europe leaves a margin of around 1.5 cents an egg, not a lot for the extra effort and inputs needed for a healthy flock, say the experts. But the resounding welcome for the product from consumers and supermarkets in Europe means there's no turning back now. BF

Norman Dunn writes about European agriculture from Germany.