Today we are going to take a look at how bird flue has impacted the global cost and availability of eggs, what the future might hold and what that means for your bakery.
Avian influenza, known informally as avian flu or bird flu, is a variety of influenza caused by viruses adapted to birds. When poultry are infected with bird flu the entire flock must be culled in order to contain the disease.
The United States is the world's second-largest poultry meat exporter and a major egg producer, with shipments reaching $4.2 billion in 2020. 19 million egg-laying chickens on commercial U.S. farms have already been culled this year due to bird flu, eliminating 6% of the country's flock. France has been forced to cull 8% of their egg-laying hens and here in the UK at least 1.7 million birds have now been culled.
This dramatic reduction in egg-laying hens as of course impacted productivity and decreased the availability of eggs, in turn pushing up the price. Wholesale prices for large eggs in the U.S. Midwest have skyrocketed, up nearly 200% from a year earlier, to $3 per dozen. In France, wholesale shell egg prices have climbed by 69% and in the UK retailers have been forced to increase prices by up to 40p per dozen eggs.
The US are looking at the option of bird flu vaccines, supporters say vaccines could help keep poultry alive, prevent financial losses and control food costs, although sceptics explain that importers could ban U.S. poultry shipments because they cannot distinguish infected birds from vaccinated ones.
The British Free Range Egg Production Association reported that 'the mandatory housing measures for poultry and captive birds, which were introduced across the United Kingdom to help stop the spread of bird flu, will be lifted from Monday 2 May 2022, the Chief Veterinary Officers have confirmed today.' They urged bird keepers to maintain scrupulous biosecurity standards as these protective housing measures are lifted.
Egg prices are expected to stay elevated as it will take many months to resume operations on infected farms.
The British Free Range Egg Production Association clearly outlined additional UK supply chain costs:
• Feed (increase of approximately 50%)
The cost of feed for egg laying birds is now £400 per tonne, up around 50% over the past two years, and is expected to rise even further with Russia and Ukraine being major exporters of key raw materials used in the feed.
• Pullets (increase of approximately 15%) The cost of pullets has risen by 5% over the past month and more than 15% in the past two years.
• Transport (increase of approximately 30%) Fuel costs continue to increase at record levels, impacting the whole supply chain, from delivery of feed stuffs right through to the delivery of a box of eggs ready for sale.
• Labour (national minimum wage increase 7%) There are significant labour shortages in a wide range of industry roles; on farm, in packing stations and egg processing plants. This has led to significant wage inflation, which will also increase with the rise in the National Minimum Wage
• Energy (increase of approximately 40%) The wholesale cost of gas from suppliers has increased by 250% since the start of 2021 and with Britain generating around a third of its electricity from burning natural gas, electricity costs are also increasing.
• Packaging (increase of approximately 15%) Figures from letsrecycle.com show that the cost of recycled paper, which is used for packaging, has increased by 50% in the year to August 2021, while energy costs, a key component of the manufacture of packaging, are also seeing record increases. Prices of egg packs have risen by more than 15% since November 2021.
How can investment in equipment result in cost savings?
When supply chain costs for your bakery increase, and are set to remain elevated, it is imported to audit your production costs and determine where costs could be reduced. Investing in a Magnacooler enables you to reduce production costs in 3 key ways:
Reduced cooling times The Magnacooler reduces the cooling time in line with baking times allowing for increased productivity.
Reduced need for space The Magnacooler removes the need for multiple free standing cooling racks which require considerable floorspace, this space can be used to increase productivity in alternative ways, offer new products or you can consider condensing your production to a smaller manufacturing unit.
Reduced workforce costs Through the reduction in cooling times, and therefore the increase in productivity, the number of employee work hours can be reduced.
If you would like to talk to a member of our team to learn more about how a Magnacooler can increase the productivity, and offset the supply chain cost increases you are experiencing, at your bakery please email info@magnacool.co.uk or call us on +44 (0) 1159 659539