UK – Government figures going back to 1990 show egg producers have seen the biggest fall in the proportion of retail value going to them compared to three other commodities.
The seven per cent drop marks eggs out from beef, dairy and wheat producers and took hold during a decrease in retail share down from 35 per cent in 2004 to just over 20 per cent in 2008.
The Department for Environment Food and Rural Affairs (DEFRA) numbers put beef farmers at the top of the retail prices share, getting 50 per cent.
Wheat producers get the lowest proportion, of around 10 per cent, with dairy and egg producers seeing around 30 per cent of shop price coming back to the farm.
Leading agricultural costing book, John Nix, stressed the amount of processing some products require before being retailed. Each process occurs a cost, hence why beef and wheat are at opposite ends of the scale, explained Nix analysts.
The percentage share back to the producer was lower for all commodities in 2013 than in 1990, the figures showed.
“Some growers have suggested the farmers’ share of the retail price is too low,” said John Nix in his monthly analysis. “Large retail outlets arguably have some influence over trading terms, but the overriding factor affecting farmgate price is the relationship between supply and demand, whereas the retail price is more affected by the cost of production plus a profit margin - at each point of processing.”
“This might vary accordingly to brand strength, something a commodity doesn’t have. Although not shown on the graph fresh produce is often lower down on the scale with potato and cabbage producer’s receiving around 25 per cent of the value.
“Looking at the overall trend, the proportion of the retail value going to the farmer has decreased for each of the four commodities shown here, eggs show the greatest fall, by almost 7 per cent.”
Top image via Shutterstock