Jamaican Egg Suppliers Scramble to Fill Production Gap09 October 2013
JAMAICA - Last year, the Jamaican egg market was said to have experienced a glut in which small-farm sales suffered.
This year, the market is still in flux but now producers are saying there could be a shortage of supply over the high-consumption Christmas holidays.
According to The Gleaner, the supply problem has been linked to shutdown of operations by several small egg farmers.
"The glut of 2012 left many farmers without the capital to maintain production," said Roy Baker, president of the Jamaica Egg farmers Association (JEFA).
"Eggs are not as available now, as they were in 2012, at this time, because of the reduced consumption coming from the GCT and the glut which affected the revenue of some small farmers," Mr Baker told Wednesday Business.
Eggs were among the products drawn into the tax net this year under the amended General Consumption Tax policy, which cut the GCT rate by one point to 16.5 per cent, but broadened the tax base to include items that were either previously exempted or zero-rated.
Following protests from egg farmers, the finance ministry removed the tax from pullet and hatching eggs but retained it on table eggs.
Josephine McGann, operator of Clinton McGann Farms Limited, further suggested that high production costs have also led to withdrawal of some producers.
"What seems to have happened is that a lot of small farmers have gone out of the business because they cannot afford to buy the feed, which has gone up over the years," said Ms McGann.
"So a lot of them have just sold out of the business."
No one seems to have a handle on just how many egg farmers serve the market.
"It's difficult to keep a number on them. They are really transient farmers," said JEFA manager Paulette Howell. "They mushroom and they die down," she said.
However, Mr Baker's guesstimate, based on the "last census in 2009" is about 2,000 small players. But the JEFA president also said the data may not adequately capture a national representation of farmers, given the sector's high attrition rate.
JEFA has less than 30 paid-up members. Together they supply roughly 541,000 dozens eggs, or 65 per cent of the market, according to the association.
The egg farmers contend that GCT has resulted in decreased consumption, causing farmers to put fewer birds into the field, The Gleaner reports.
Caribbean Broilers Group, a chief supplier of pullets and chicken feed, as well as a producer of eggs, said JEFA's handling of the tax issue is partially responsible for market conditions.
"JEFA frightened their members when the government imposed the GCT on eggs," said CB Group head of corporate affairs, Dr Keith Amiel.
"Based on that, farmers did not put the amount of pullets they should have put in," said Amiel, "and so you have this stupid situation. So there could be a shortage of eggs, relative to tradition."
The farmers, however, contend that it is the combination of market conditions, the tax, and cost of business that have thrown off the planning period for farmers.
"The planning cycle is fairly large. Supplies of pullet have to be imported, then hatched and they have to be grown out to at least 18 weeks before they can be sold to farmers," Mr Baker said.
The egg supply is affected when inadequate numbers of pullets are put into production by farmers, he indicated.
Annual production now runs to some 12 million dozen eggs, yearly, or one million dozens monthly, Amiel said.
The top three egg producers, according to JEFA, are Caribbean Broilers, which serves the market through subsidiary Chippenham Eggs; National Eggs; and Campbell's Egg Farm in Trelawny.
Chippenham was doing 600,000 dozen eggs at acquisition by CB, but the output was not disclosed.
Mr Baker said current production is down by about 15 to 20 per cent across the market.
Some 150,000 pullets are being supplied to farmers in hopes of minimising the problem.
"Caribbean Broilers Group would have distributed some 60,000 and Jamaica Broilers Group would have distributed 90,000, so that there will be new birds that will be laying in full for Christmas," Amiel said.
The JEFA and McGann, however, remain cautiously optimistic.
"We are hoping they will be adequate, but the amount of birds going in is still less than we want to see," said Mr Baker.
He rationalises that increased production from the birds being put in "should be enough to stave off a shortage, given the reduced consumption".
Ms McGann says, however, that unless eggs are imported, demand will go unsatisfied.
"It's really difficult and I don't know what's (going) to happen but, at Christmas, there won't be enough eggs at all, unless somebody brings in a container," she said.
McGann Farms, which produces 150 to 200 cases a week, added 4,000 birds to its production line. Ms McGann expects to produce an additional 10 to 11 cases per day.ThePoultrySite News Desk