The fifth largest supermarket chain in the UK, Bradford headquartered Morrisons, is in the process of setting up an egg supply chain direct to producers in NI.
On offer to both new and existing free-range and organic egg producers are long-term contracts that come with a guaranteed percentage margin over costs of production.
Explaining how the contract will work, Tyrone egg supplier, Alfie Shaw, who is leading on supply chain development in NI, said costs of production will be based on those independently compiled by ADAS for the British Free Range Egg Producers Association (BFREPA).
ADAS figures
The ADAS figures are published monthly and cover all inputs, including feed, labour and pullets, as well as interest and depreciation charges on buildings and equipment. In the Morrisons contract, these costs are re-adjusted quarterly to take out peaks and troughs that might happen with monthly data.
“We are putting confidence in the industry and stabilising the market.
“The contract is not just a simple feed-tracker. It guarantees a percentage margin,” said Shaw.
He maintained that producers will not be expected to go beyond current industry standards, such as Lion Code and RSPCA Approved.
There is also no requirement to source pullets or feed from a particular supplier, other than that the feed mill must be part of the Universal Feed Assurance Scheme (UFAS).
“We can give support and help people if they are coming from a system where it is all done for them, or where they are a new entrant,” he said.
The first consignment of NI eggs was sent over in March, with all eggs graded at the Morrisons-owned Chippindale Foods in Yorkshire, which supplies the retailer with about 350m eggs per year.
It is run as a separate business, with plans to grow sales into other markets, hence the interest in expanding its supply base.
Producers
But why not just source off other egg-packers in NI rather than setting up your own supply chain?
“Morrisons wants to deal directly with their own producers, develop a short supply chain and a stronger bond – it means we can react quicker to market trends and to farmers’ needs,” responded Shaw.
He said that producers will be brought together as a group to facilitate knowledge transfer, and while he did not want to disclose targets for volumes traded, he did say the initial aim was to achieve “multiple lorry loads of eggs from NI each week”.
“We want to build a strong supply chain with the right people. We want good producers. The contract on offer is a game-changer for the egg industry in NI,” he said.
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The fifth largest supermarket chain in the UK, Bradford headquartered Morrisons, is in the process of setting up an egg supply chain direct to producers in NI.
On offer to both new and existing free-range and organic egg producers are long-term contracts that come with a guaranteed percentage margin over costs of production.
Explaining how the contract will work, Tyrone egg supplier, Alfie Shaw, who is leading on supply chain development in NI, said costs of production will be based on those independently compiled by ADAS for the British Free Range Egg Producers Association (BFREPA).
ADAS figures
The ADAS figures are published monthly and cover all inputs, including feed, labour and pullets, as well as interest and depreciation charges on buildings and equipment. In the Morrisons contract, these costs are re-adjusted quarterly to take out peaks and troughs that might happen with monthly data.
“We are putting confidence in the industry and stabilising the market.
“The contract is not just a simple feed-tracker. It guarantees a percentage margin,” said Shaw.
He maintained that producers will not be expected to go beyond current industry standards, such as Lion Code and RSPCA Approved.
There is also no requirement to source pullets or feed from a particular supplier, other than that the feed mill must be part of the Universal Feed Assurance Scheme (UFAS).
“We can give support and help people if they are coming from a system where it is all done for them, or where they are a new entrant,” he said.
The first consignment of NI eggs was sent over in March, with all eggs graded at the Morrisons-owned Chippindale Foods in Yorkshire, which supplies the retailer with about 350m eggs per year.
It is run as a separate business, with plans to grow sales into other markets, hence the interest in expanding its supply base.
Producers
But why not just source off other egg-packers in NI rather than setting up your own supply chain?
“Morrisons wants to deal directly with their own producers, develop a short supply chain and a stronger bond – it means we can react quicker to market trends and to farmers’ needs,” responded Shaw.
He said that producers will be brought together as a group to facilitate knowledge transfer, and while he did not want to disclose targets for volumes traded, he did say the initial aim was to achieve “multiple lorry loads of eggs from NI each week”.
“We want to build a strong supply chain with the right people. We want good producers. The contract on offer is a game-changer for the egg industry in NI,” he said.
Read more
Egg farmers face closure as packers refuse price increase
5m birds taken out by avian flu in England
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