Compared with the beginning of 2022, the price of chicken eggs in stores has surged 30-40 percent. The main reason? A sharp increase in the price of chicken feed components.
Since the beginning of the year, the price of eggs has jumped by 30 percent on average, however there are vendors who have increased their prices by 40 percent within the same period of time, Selver communications director Rivo Veski told ERR.
The extraordinary price increase was not due to the recent Easter holidays, however; it has come in connection with the prices of chicken feed components, which have risen sharply in recent weeks. The availability of these components has recently grown more insecure as well.
"If you consider what these feed components may be, then certain countries' production play a role whose availability has grown more limited," Veski noted, referring to the impacts of the ongoing war in Ukraine. "On the other hand, substitute countries have started to protect their production; they aren't exporting as much, but rather keeping it for their domestic markets."
Antu Mõis OÜ produces organic eggs sold under the Kikerikii brand. Antu Mõis board member Lauri Bobrovski said that they increased the price of their eggs by ten percent in connection with last year's increase in the cost of electricity, but the impacts of the war in Ukraine are only just being assessed, and it's likely they'll have to raise their prices again sometime in late summer.
"We didn't increase our prices as drastically at first, although there'd be reason enough to do so, as the cost of grains in organic production has likewise gotten much more expensive," Bobrovski said.
He added that if the producers of regular eggs increase their prices, then the price of a regular egg will start to approach that of an organic egg, but raising prices is even more risky for organic producers, as they don't know what exactly consumers' pain threshold is — meaning at what point they can't afford organic eggs anymore and will buy free-range or battery-cage eggs.
Won't be the last increase
As of late February or early March, Antu Mõis is out of their own grown grains, and the company is now dependent on grain prices.
"The difference in prices from a week prior to and a week after the start of the war [in Ukraine on February 24] was nearly 50 percent in one case," Bobrovski highlighted. "Prices absolutely soared."
Valga County poultry producer Sanlind OÜ has increased their prices once so far this year, and their next increase is planned for the beginning of May.
"When we increased our prices for the first time, I thought that we wouldn't be increasing it any more this year, but unfortunately we had to do so again," said Sanlind director Andres Puksov, who likewise cited increasingly expensive feed costs.
"The cost of feed has nearly doubled," Puksov explained. "Cereal grains, everything related to rapeseed, soy — all components used for making feed have gotten so much more expensive, and as feed accounts for 70 percent of the cost of egg production, then that has driven up the price of the product."
Veski also cited that in addition to feed components, the cost of chicks, packaging, fuel, electricity and labor have all gone up as well.
"This price increase will not be the last this year," he warned. "The next price increase is forecast to be related more directly to feed, but that is a matter for producers." The purchase price, he added, does not allow for any wiggle room in reducing prices below a certain point even in a highly competitive situation.
Half-dozen cartons increasingly popular
Higher prices are impacting consumer behavior as well. According to Selver, an analysis indicated that egg product sales around Easter this year had decreased by 10 percent compared with last Easter.
Veski noted, however, that last year's reference base was especially high as due to extensive COVID-19 related restrictions, many shopping centers were closed during the holiday last year, and supermarkets were just about the only place people could go. This year, however, consumers have become more conservative in their spending in connection with the war in Ukraine.
One interesting change Veski highlighted was the fact that while previously, most shoppers would buy their eggs by the ten-egg carton or even larger cartons, half-dozen cartons have seen increasing sales this year. He suspects that consumers are being more thoughtful in their grocery shopping, but added that increased awareness and a shift toward more responsible consumption each play a role as well.
it's not just eggs being hit with increasing prices either — all food products are.
The supermarket chain representative acknowledged that talk of prices going up first began last spring and summer, with the energy crisis last fall increasing them further, and prices have yet to begin to fall again in a single category.
"We don't see price increases slowing down in the second half of the year," Veski said. "Regarding the cereal grain crisis — while it can't be called an outright crisis yet, producers, especially smaller ones who don't have large volumes or stocks, are going to have to start increasing prices this fall, during the new season, once commodities at new prices begin to arrive at some point. Cereal grains are the number one thing that will impact very many food categories, especially baked goods, such as pastries, white bread and dark bread."
According to the producer of Kikerikii eggs, they are secure and have agreements in place through the next harvest, but in reality they have not fully applied new prices to their products yet, and adjustments to price lists are being made very carefully. Bobrovski said that several clients have also accommodated them and adjusted their own margins in order to maintain current prices.
Some more optimistic
The director of Sanlind, however, is more optimistic about the future, believing that they won't have to increase prices again anymore this year.
Puksov said that consumers have a line as well, and he doesn't believe that the price of chicken feed components will increase any further. Summer is approaching as well, when people typically buy fewer eggs and prices go down. It's likely that there will be no such seasonal price decrease this year; if anything, the trend is in the opposite direction.
"Should the war issue end at one point, then we might see some sort of stabilization or even a move downward," he added.
He also cited that a lot of eggs were imported by the EU from Ukraine, but as Ukraine's veterinary authority is currently not operational, the country cannot currently export eggs either, meaning that competition has been reduced somewhat.
"I can't say that this is a win for Estonian producers, but right now it's a little easier to sell eggs than it has been for several years," Puksov said.
According to Statistics Estonia data, compared with December 2021, the prices of staple foodstuffs in Estonia increased more than 9 percent over the first three months of 2022. The biggest jump was recorded in the price of chicken eggs, but the cost of coffee, tea, cocoa, fruits, vegetables and fish as well as seafood products all saw sharp increases in this time as well.
Editor: Aili Vahtla