Scandalous eggs. Why in Ukraine eggs do not yet cost 17 hryvnia each, but everything can change

In the autumn of 2022, Ukrainian consumers were outraged by the sharp increase in retail prices for chicken eggs. This product has become the leader in the inflation race. According to the results of 2022, egg prices increased by 76 percent, food prices in general increased by 34.4 percent and the inflation rate reached 26.6 percent throughout the country..

While the turmoil over rising egg prices has not yet subsided, in January 2023 this popular product became the epitome of a corruption scandal. Recall that the media published the facts of the purchase of eggs for the needs of the Armed Forces of Ukraine at 17 hryvnia each, which is 2.4 times higher than in large supermarket chains.

War and chickens. Will poultry farms be able to restore lost potential?

In the fall of 2022, war-related problems in the industry led to a sharp increase in the cost of eggs – the destruction of poultry farms, a decrease in the number of laying eggs, etc. Svetlana Pashko, Senior Research Fellow in the Pricing and Agricultural Market Department of the National Science Center “Institute of Agricultural Economics,” recalls: With the start of Russia’s total occupation of Ukrainian lands, most of the egg producers in the central regions of Ukraine found themselves on the battlefield, and capacities in the Donetsk, Kharkov, Kherson and Kyiv regions were lost. cause a decrease in the supply of eggs in the market and increase in their prices..

“Chernobaevskaya”, one of Europe’s largest poultry farms in the Kherson region, has become a meaningful symbol of the damage done to the industry. In March 2022, a business occupied and robbed by the Russians was left without electricity, unable to feed the poultry and export finished products, and approximately 4.4 million chickens died as a result.

Egg producer Agroholding Avangard, which also includes the Chernobaevskaya poultry farm, estimates its losses as a result of Russian aggression as follows:

• loss due to bird deaths: UAH 0.7 billion ($20 million)
• Loss of revenue from unlayed eggs: UAH 5.8 billion ($160 million)
• broken and stolen equipment: UAH 5.5 billion ($150 million)
• total financial losses: UAH 12 billion ($330 million)

According to the avant-garde agricultural conglomerate, the destruction of this key business in the industry has led to chicken egg shortages and increased prices.

Now the supply of eggs on the shelves of supermarkets and, accordingly, the dynamics of prices depend on how quickly Ukrainian poultry farmers managed to overcome the consequences of Russian aggression and restore the industry’s potential.

As he reported Focus Sergey Karpenko, Executive Director of the “Ukrainian Poultry Breeders Association”, is aware of his social responsibility and important role in ensuring the food security of the country, At the end of last year, egg producers signed a Memorandum of Understanding with the Ministry of Agricultural Policy of Ukraine, outlining the main measures necessary to stabilize the market and prevent sharp fluctuations in the future..

“The producers have fulfilled their obligations and planted approximately 4.5 million young poultry per day in the last quarter of last year, which is 25% more than in September. The increase in the number of laying hens continued in January of this year. there is a gradual renewal of egg production volumes“Karpenko continues.

Svetlana Litvin, analyst of the Ukrainian Club of Agricultural Enterprises (UCAB), confirmed that the number of laying hens is gradually increasing at industrial enterprises, which are the main supplier of eggs in winter. However, the addressee Focus warns that this is a long process. Svetlana Pashko says that today the potential of the industry is not regained, because many enterprises remain in ruins or are located in temporarily occupied territories.

The Russian energy terror creates additional problems for farmers. Power supply problems have negative consequences for poultry farms:

• increase in the cost of production, including the power supply from generators;
• significant production losses during laying for hatching, lack of young animals and reduction in production volumes.

Spring eggs. How will the price of a dozen chicken eggs change in the next six months?

It now remains to find out how the announced trends in the industry will affect retail prices of chicken eggs in Ukraine. According to Sergey Karpenko, the increase in the supply of chicken eggs in the market due to the growth in production volumes and the strengthening of the seasonal factor will have a direct impact on price formation at the end of the expansion in household income. So in the first quarter, eggs in March may become cheaper.

According to the forecast calculations of scientists from the Institute of Agricultural Economics, the prices for chicken eggs will remain at the level of UAH 70.60-71.50 per dozen until the Easter holiday, depending on the brand and conditions in a particular supermarket chain.

“Let me remind you The number of laying hens is updated every spring, but in 2022, due to the difficult situation in the country, there was a technological break. Egg production will increase in the coming months because laying hens, whose numbers were started again in the enterprises 6 months ago, will start to lay eggs.“, – explains Svetlana Pashko.

According to Pashko, egg prices are expected to decrease after the Easter holidays (April 16, 2023 – Focus). Improvement in energy supply after the end of the heating season will also positively affect price trends, as power outages and generators also affect egg prices.

“The egg price may not fall as much as we would like in the next two months – only 10-15%,” continues Svetlana Litvin. However, the addressee Focus guessing it After Easter, the cost of eggs will decrease by 35-40% compared to the current leveldue to the following two factors:

• increased supply from households due to warmer weather
• Declining demand of the population after Easter

So, in the first half of 2023, we can expect the following change in the average prices of a dozen C1 chicken eggs in major supermarket chains:

• the first decade of February: 74.15 UAH;
• Easter Eve: (April 16): UAH 66.74 – 63.03;
• After Easter (from the second half of April): 48.20 – 44.49 UAH.

To clarify: no forecast under any scenario indicates that egg prices will rise to UAH 17 per piece. This cost of eggs does not even come close to market expectations if we take into account possible inflation. Recall that according to the latest NBU forecast, inflation in 2023 will slow down to 18.7% per annum.

European eggs. Why does Ukraine introduce a new egg classification?

Attention to chicken eggs has not only been attracted by the price hikes and corruption scandals that I mentioned above. Focus. The recently published publication for public discussion of the draft order of the Ministry of Agricultural Policy of Ukraine “On approval of chicken egg requirements” also aroused interest.

The draft order lays down the new requirements for chicken eggs. Specifically, regarding this:

• sorting eggs by quality and weight;
• egg stamping;
• marking of packages (containers) and shipping containers for eggs;
• informing the consumer about the labeling of containers for industrial eggs and the sale of eggs on a piece-by-piece basis;
• packaging and repackaging of eggs;
• requirements for records to be kept by market operators.

Also, in the new project, the Ministry of Agricultural Policy proposes to divide eggs into “A” class and “B” class. In the first case, the eggs should have a clean, solid shell, an inactive yolk, clear contours and no extraneous odors.

By weight, class A eggs are planned to be divided into categories:

• XL – eggs weighing 73 grams or more;
• L – eggs 63 g or more, but less than 73 g;
• M – eggs 53 g or more, but less than 63 g;
• S – Eggs weighing less than 53 g.

as learned Focus, the appearance of this document is linked to the European integration of Ukraine. In response to a request from the publication, the Ministry of Agricultural Policy replied that the draft “On approval of chicken egg requirements” was published on the official website of the Ministry of Agricultural Policy on January 26, 2023 to collect proposals. and opinions can be sent to the ministry within one month from the publication date of the document.

“The draft order “On approval of chicken egg requirements” was developed by the Ministry of Agricultural Policy on the basis of EU legislation alone, which will allow Ukraine to take another step towards integration with the EU market and to approve Ukraine as an EU. the candidate country can quickly and efficiently fulfill its obligations under the Association Agreement., – describe this step in the press service of the ministry. “It is assumed that this decree will enter into force from the day of its official publication and will enter into force on January 1, 2028, approximately six years later.”

Sergey Karpenko confirms that the initiative was announced with the aim of aligning chicken egg requirements with EU legislation in terms of quality indicators or characteristics and production processes and methods – stamping, packaging, labeling, record keeping. Karpenko, Draft order “on approval of chicken egg requirements” will take effect on January 1, 2028, will not affect current pricing in any way.

“Now in Ukraine there are different technical conditions for this category of food products from those in Europe. Both in our country and in European countries eggs are sorted by weight. But if in Ukraine an egg weighing 53-63 grams is labeled with category C1, then in Europe – M. Accordingly, soon in Ukraine on eggs and shipping containers S, M, L, XL will be indicated instead of C2, C1, C0 and CB, ”explains Svitlana Litvin.

Also the addressee Focus recalls that the following classes of eggs have been introduced:

• Class A: An egg with an attractive appearance, intended for sale to the final consumer.
• Class B: eggs with certain defects such as contamination and intended for further processing, especially dry and liquid egg products

According to Svetlana Lytvyn, this principle, which has not yet been established in regulatory documents, was previously practiced by Ukrainian enterprises.

Svetlana Litvin says, “The new requirements will not affect pricing as they will not entail any noticeable costs for producers. As for more expensive and cheaper products, even now a larger egg is sold at a higher price and this pattern will continue.” .