"We are facing oversupply of eggs in the UK. Without doubt there has been a degree of over-confidence throughout the entire egg industry, from the producer to the packer and the retailer. There has been over-investment which has left us as a packaging company with a very weak negotiating position with the major retailers," was the message conveyed to NFU Cymru poultry farmers by Richard Kempsey, Agricultural Director for the Stonegate egg packaging company.

Speaking at the annual NFU Cymru Poultry Conference, Mr Kempsey said: "Don't underestimate the uncertainty and volatility of the egg market. The storm can and will undoubtedly continue. Wheat price increased by 78 per cent in the last six months of 2010 and compound feed increasing by 41 per cent. Cost of production prices in terms of feed and energy, remain extremely unsettled for the foreseeable future."

NFU Cymru members at the well-attended meeting held at the Institute of Biological and Environmental Rural Sciences (IBERS) at Aberystwyth also learned about the research activity taking place at the site for the poultry sector to improve feed conversion efficiency whilst maintaining and enhancing the health of broilers and layers.

Concerns were raised by existing producers that the industry was already in a state of over-supply and yet there were still numerous planning applications for new poultry units being considered by local authorities.

Members called upon the egg packers to provide more forecasting on the position of the egg market as this would put potential new investors or those wishing to expand in a far better position to make a decision on how to direct their business.

Tony Burgess, NFU Cymru Poultry Board Chairman said: "The poultry sector in Wales in the last few months has experienced the perfect storm. Producers have had to deal with difficult circumstances in terms of high feed prices, low returns and a banking system in turmoil. Compared to just twelve months ago, producers are facing very difficult and different circumstances. Once we are through this difficult period, confidence will need to be regained. We must explore ways to build better security into contracts in an attempt to reduce the risk and volatility within the sector."