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Egg business up in arms over price slump

The price of eggs has fallen in grocery stores and wholesale markets, leading advocacy groups to worry that many egg farmers may soon be forced into bankruptcy.

Kananmunia liukuhihnalla.
Suomessa tuotetaan noin 63 miljoonaa kiloa kananmunia vuodessa. Image: Sanna Kähkönen / Yle

The price being paid to egg farmers began to fall last year. Depending on the quality of the egg, the price that packing plants pay to egg producers has dropped 10 to 20 cents per kilogram. The latest statistics showing that the average going price paid to egg farmers for a kilo of eggs is 1.10 euros.

The wholesale egg business in Finland is dominated by two companies: Munakunta and Munax. Both say the drop in price is attributable to overproduction. Packing plants fiercely compete for market share and any price adjustments are blamed on the competition. Munax blames the market leader, Munakunta, of purposely dragging prices down.

“The market leader’s predatory pricing has resulted in a dramatic fall in wholesale prices which has led to a downward spiral in the prices paid to the producers,” says Munax Director Janne Torikka.

Munakunta says its pricing conforms to the market situation and sends a retaliatory message to Munax, whom it believes to be responsible for the overproduction.

“Perhaps it would have been better not to carry out the expansion in production,” says Munakunta Director Jan Lähde.

Trying the bank director’s patience

Somero resident Lassi Palander received a notice from the packing plant last week, the latest in a series informing about a price drop. Palander says the current price farmers receive is far too low.

“The price should be about 30 cents higher. That way we could recover our investment costs, pay back our debts and maybe even make a small salary,” he says.

The changes in price that have already occurred can mean losses of up to tens of thousands of euros for egg farmers. According to Palander, farmers have a limited ability to influence matters.

“There’s nothing left to do but try and work in the most economical, efficient manner possible,” he says.

After battery cages were banned in 2012, several egg farms in Finland were forced to close. Those that were left had to make sizable investments in new facilities and equipment. Finland’s Poultry Association says the threat of bankruptcies is looming large due to plummeting prices.

“We are talking about several hundreds of thousands of euros in debt here. It’s all hanging on how long the patience of the bank director and the feed supplier holds out; how long the farmers are able to scrape by,” says Lea Lastikka, executive director of the association.

For consumers, the situation is good. There are plenty of eggs to be had and their price is lower than last year in stores.

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