Avian flu: cost or excuse to raise egg prices?
The data reflects a sharp increase in egg prices in recent months. A dozen medium-sized eggs, which are usually the most consumed, has gone from around two euros to more than three in the store. The final price of this basic product cannot be compared to the price hike experienced by olive oil. However, it is a rise that has begun to worry consumers, although its impact on the Consumer Price Index (CPI), due to its weighting, is very insignificant compared, for example, to other basic products like bread. In any case, everyone immediately recalled the effects of avian flu and the measures that the Spanish government implemented to prevent the spread of the disease among birds, such as their confinement. Some of the price increase is related, those in the sector admit, but the data shows that a large part corresponds to the improved profit margins of those who sell the eggs to the end consumer. In January, the farmgate price of a dozen eggs – the price farmers received for their product – was €1.74, while the retail price to the end consumer was €2.40. This difference means that consumers were paying 38% more than farmers received, according to monitoring by COAG (the Spanish Confederation of Farmers' and Livestock Organizations). The fact is that, in October, the farmgate price of the same dozen eggs was €1.97, while consumers were paying €3.15 in stores. The profit margin for intermediaries or distributors has increased by 22 percentage points. If in January the difference between the farmgate price and what the consumer pays was 66 cents, in October it rose to €1.18, a significant increase. The price for farmers increased by 13% during this period, while the price paid by consumers rose by 31%.
Despite concerns about avian flu, data from the National Statistics Institute (INE) shows that the price increase for eggs began in March, before the outbreak of the disease affecting birds. The Minister of Agriculture, Luis Planas, also recently stated that the price increase for eggs is not linked to avian flu.
It would be necessary to determine whether costs, such as transportation, have risen enough to justify these increases. The Ministry of Agriculture or the Ministry of Consumer Affairs would do well to look into this, as they did previously with the profit margins of oil companies on gasoline. In any case, the old problem of the difference between what the producer receives and what the intermediary or distributor earns has resurfaced, an issue that farmers already raised in the streets a few months ago.
In any case, everyone agrees that there is no risk of shortages. In total, the number of laying hens in Spain exceeds 50.7 million, of which 8.5% are located on approximately 4,000 farms in Catalonia, according to data from the Ministry of Agriculture. Overall, more eggs are produced than are consumed in the Spanish market. In fact, the sector exports between 15% and 20% of its total production.
