Arla Foods Sees Soaring Egg Prices On The Horizon

Arla Foods Ingredients, a leading developer and supplier of nutritional and functional milk-based ingredients to the global food industry, recently reported that a wave of unprecedented pressure in the world market for eggs has left the North American market facing tightening supplies and rising prices. But companies could save millions of dollars by switching part or all of their egg usage to egg replacers, according to Arla Food Ingredients.

The U.S. has seen its worst drought in 50 years, which has badly hit grain harvests, in turn forcing up feed prices. With feed accounting for 60 percent of egg production costs, this is set to have a dramatic effect on egg prices worldwide.

Meanwhile, in Mexico, which is the world’s biggest consumer of eggs, a bird flu epidemic has resulted in the slaughter of millions of chickens. This has prompted the Mexican government to relax import restrictions on eggs from the U.S., leading to tighter supplies and higher prices in the American market. Imports of shell eggs from the US to Mexico reached 755,000 dozen in the first half of this year – compared with 654,000 dozen in the same period of 2011.

Further afield, in Europe, the recent implementation of the EU’s Welfare of Laying Hens Directive, which banned the use of cramped battery cages, has led to soaring egg prices because egg producers in as many as 10 EU member states have still not met requirements for more spacious ‘enriched’ cages. As a result, supplies of legal eggs across Europe have tightened, helping to push world prices even higher.

Arla Foods Ingredients has developed a new calculator designed to illustrate the savings available to companies who switch all or part of their egg usage to egg replacers. The Nutrilac® calculator, created for the bakery industry, shows that a large cake manufacturer using 11,000 tons of liquid eggs a year would save $1.7 million by using egg replacers on a 50 percent replacement ratio.