Estonian egg production falling 29 percent last year was caused by an outbreak of salmonellosis in poultry farms of several major producers. Their market share was quickly seized by cheaper Latvian and Lithuanian competitors.
The egg sector suffered a blow in the fall of 2018 when salmonellosis was diagnosed in one of the farms of Sanlind OÜ. Owner Andres Puksov was forced to destroy his 200,000 chickens and was not sure he would ever recover. He did not produce anything last year.
Puksov says that production facilities and specific fittings have no other use nor is there any interest in renting them. Successful past business allowed Puksov to pick up where he left off and start egg production again. His goods have not hit the shelves yet.
"We got the chicks in August and they have started laying eggs by now. We are working with two farms, one is a perchery house and the other produces eggs of hens raised in batteries," the farmer says.
The products should hit the shelves at Coop from the second decade of February.
"We'll see how our products will be received. The relaunch of our other farms will depend on that," Puksov explains.
Sanlind started again with a modest 30,000 birds, while the owner says it is not enough to remain competitive.
"We need to expand, while it will depend on sales whether we can pull it off. You can do all sorts of things, but it is of little use if you cannot move your product," Puksov says. "Eggs from Latvia and Lithuania are coming here and being sold dirt cheap. There is now a 20 percent price difference between Estonian and Balticovo eggs. There are a few huge producers in Latvia and Lithuania, ten times bigger than we are. If our top producer has room for 300,000 chickens, they have three million."
The Latvian major producer exports over half of its production.
"And when they have a major surplus, they sell below cost price to get rid of the eggs," Puksov knows.
Local production took a nosedive
If the market share of local eggs was around 60 or even 70 percent before the outbreak of salmonellosis (the producers do not have precise statistics), it has fallen to just 47 percent since then.
Sanlind was not the only one hit, even though the disease took its heaviest toll there.
Another major egg producer DAVA Food AS had to put down 55,000 birds because of the disease last spring. The company is the biggest Estonian producer with 275,000 egg laying chickens and nearly half the Estonian market.
CEO of DAVA Foods Vladimir Sapožnin also admits that Latvia and Lithuania have flooded the market with their cheap products.
"Supermarket chains are introducing private label eggs, with Maxima and Rimi especially having Latvian-Lithuanian-Polish or even Ukrainian eggs. Shamelessly cheap eggs," the CEO says. "Egg is pure protein. If you calculate the price of their eggs in kilograms (around €1.60-1.70), you cannot even buy fatty pork for that."
While DAVA Foods might be the largest egg farmer in Estonia, it pales in comparison with southern neighbors. Latvia's leading producer Balticovo owns 2.8 million chickens. Poland's leading chicken farmer has 40 million birds.
The market is also affected by people slowly starting to prefer perchery and free-range eggs even though fewer eggs are laid that way. However, head of the Estonian Poultry Society Jarno Hermet said that these new preferences have not affected production to any great degree.
"Rather, we saw a couple of new small producers last year who specialize on perchery eggs. They should have added to total production then. But the chance fits inside 1 percent," Hermet says.
"The shop makes these choices," he says. "We might even like it, while we cannot afford to throw the batteries out and put perches in ahead of time. We have invested so much in batteries over the past decade that it would be a terrible waste," the farmer said.
Editor: Marcus Turovski