MISSISSAUGA, ON, Nov. 5, 2013 /CNW/ - Egg Farmers of Ontario (EFO) has
established the price Ontario egg farmers are paid for each dozen large
eggs produced will drop six cents to $1.90 from $1.96 effective
November 11, 2013.
Lower feed input costs currently measured by Ontario's farm pricing
model are triggering the reduction of the price paid to egg farmers
across the province.
The six cent price reduction will not necessarily trigger an equivalent
decline in retail prices since the price of eggs in supermarkets is not
set by farmers. Egg farmers sell their eggs to grading stations, who in
turn sell them to wholesalers or retailers.
Retailers set consumer prices. This is a complex process that has
retailers using features such as "loss leader" pricing, below cost, on
staples such as eggs, milk and bread as retailers compete for market
share. The total pricing mix across the typical consumer food basket
purchase is used to achieve retailer profitability. Just as retailers
cannot stay in business if they "lose" money, farmers also need a fair
price for eggs to sustainably supply a safe local food.
"The fair farm price reduction of six cents means there is six cents in
cost removed from the marketing chain," said Harry Pelissero, EFO
General Manager. "This will result in some combination of lower prices
or higher margins equal to six cents depending on decisions taken by
the other players in the marketing chain."
The fair farm pricing model tracks all costs of producing eggs. The cost
of feed inputs for laying hens represents about 35 per cent of the
calculated cost of producing a dozen eggs. A drop in feed input costs
means this six cent per dozen cost reduction can be passed through to
the marketing chain and consumers while maintaining fair income levels
for Ontario egg farmers.
Egg Farmers of Ontario represents approximately 440 egg farmers and
pullet growers in Ontario. It is an independent, self-governing
organization funded entirely by egg and pullet farmers.
SOURCE: Egg Farmers of Ontario
For further information:
Director of Public Affairs
Eggs Farmers of Ontario