Egg Glut: How Nigeria ended up with 20 million unsold crates of eggs

Nigeria’s Poultry sector is currently in the middle of a productivity crisis and the Poultry Association of Nigeria has called for urgent intervention from the government.

During a press conference last month, the Chairman of the Poultry Association of Nigeria (PAN), South-West Zone, Rev. Oluleye Gideon, blamed the recent naira redesign policy of the Central Bank of Nigeria for the problem.

He explained the cash shortage that was occasioned by the implementation of the policy meant that lots of eggs could not be sold. He, therefore, urged the government to mop up 20 million unsold crates of eggs.

Rev Gideon also urged FG’s developmental agencies to save the subsector of the economy from total collapse, as it contributes about 6% to GDP. He said:

“They should help in mopping up about 15 to 20 million crates of eggs and chicken unsold in the economy right now to ameliorate the losses of the farmers.

“These products should be used in feeding the people in IDPs and all our correctional centres all over the country.

“Some could also be used in the government hospitals where meals are served as eggs helps for quick recovery and in building up the immunity of the sick patients.”

A few weeks before the reveal of the 20 million unsold crates of eggs statement, Mr Godwin Egbebe, National Publicity Secretary of the Poultry Association of Nigeria (PAN), also called on the FG to intervene in the current egg glut in the poultry market.

Mr Godwin Egbebe said farmers were running at a loss due to the glut and appealed for government intervention at all levels, adding:

“Due to the current egg glut, major poultry farms have now dropped their prices and are encountering total loss.

“At large farm gates, a crate of eggs now goes for as low as N1,700 and N1,800 as against N2,000 or N2,100 that was sold just weeks ago.

“The egg glut is on the increase, the farmers are churning out eggs every day but there are low demands following the cash crunch in the country.”
States’ intervention

Meanwhile, some state chapters of the Poultry Association have already successfully lobbied their Governments to start the mop-up, as Nairametrics reported that Plateau State became the first to purchase eggs in large quantities in a bid to mop up supply.

The Plateau Governor, Simon Lalong, said that the measure was designed to alleviate the plight of farmers caused by the recent egg glut in the state. NAN quoted him to have said:

“He said that the mop-up was the state’s first intervention in addressing the challenges facing poultry farmers in the state.

“The governor, represented by the Secretary to the State Government, Prof. Danladi Autu, said that the state government would sustain the intervention by making them suppliers of eggs for the school feeding programme.”

The Governor added that poultry farmers had contributed to the internally generated revenue of the state, in addition to creating employment for the youths, adding the state government will do anything possible to secure poultry business in the state.

Major beneficiaries of the mop-up were charities, and the Chairperson, of the Association of Orphanages and Home Operators in Nigeria in Plateau, Mrs Kyenpiya Nyabam said “2,000 orphans in the state would benefit from the eggs.”

Economic confusion 

Interestingly, despite the egg glut in the country, the prices of eggs are not coming down. To find out why, Nairametrics spoke to Africa Farmer Mogaji, an Agric stakeholder with many years of experience. He acknowledged that in Lagos and other states, the price of eggs increased even during this glut, explaining that this was due mainly to a distribution and marketing problem.

“This is a distribution challenge. If the associations were not proactive because they should know that since covid farmers made a lot of losses, then they should have set up a marketing mechanism that should empower the farmers because there are estates that need help and it can be sent to the end consumer’s doorsteps.

“During the lockdowns, I advised a poultry farmer who complained that he can’t move his goods to move to estates, as people can’t move to sell his crate there at farm gate prices, the guy sold all his eggs in 48 hours, the estates and markets are there, and still supplies them in Ekiti.”

He further noted that an egg glut happens every year and is usually exacerbated by direct and indirect government policy, with 2023’s case being the Naira redesign policy which led to a naira scarcity.

On the overproduction of eggs 

Mogaji stated that Nigeria is not overproducing, “we are not just planning, I say this we not planning right because egg gluts happen every year for almost 30 years” he revealed.

“There are particular times that affect the industry generally in terms of the whole country. But the egg glut happens every year, and that’s what the association does not talk about because they aren’t planning properly.

“They are not as coordinated as they should be and they are not looking out for the interest of other poultry farmers by not being proactive with egg production.”

He revealed that most years, especially as Christmas approaches, most farmers sell off old layers because they are old. So, they prepare younger layers, and when those begin to lay eggs, they lay smaller eggs that don’t command high prices.

“ So the middlemen who buy, dump it in the market, the ones that have big eggs find it difficult to sell.

“For instance, if smaller eggs are selling for N1500 per crate, and you are selling bigger eggs for N1800 per crate, Nigerians are sensitive to prices, so this is the common theme that happens every year, but it does not affect the whole country, it affects Ogun, oyo, and maybe Kaduna, as Ogun and Oyo are the egg baskets of Nigeria.”

He added that if an egg glut happens every year for at least two decades, the poultry associations should have a solution for it by now. He said:

“ I say this because, during COVID, there was an egg glut because people could not move it from farm to market.

“This is how the poultry sector works, and almost every agric sector, you produce, and some people who have been in the business for 2-3 generations, they go to farmers, and move to urban centres, they don’t have lots of capital, many don’t bank their money, they do cash, during covid lockdowns, they could not find transport to pick eggs, so they were wasting.”

He warned that once the sector is affected by a distribution challenge, the farmers suffer losses. He said:

“In the backlog, there are bad eggs, a family member recently complained that she bought eggs at retail prices and they were all bad, she needed a place to buy where she was sure was coming from the poultry, so the thing again is, monitoring and evaluation.

“Farmers know they should not sell bad eggs, distributor however don’t care because they feel the consumer would buy anyways, so when people buy bad eggs that have not been sold for a while, the glut continues.”

He explained that another factor that has contributed to the glut is the government FX policy on maize imports, which has made inputs more expensive and contributed to difficulties. He said:

“The cost of feed has gone up, through government policy they removed maize from the CBN list
“The price of maize moved from N45,000 per ton to N145,000 per ton, including locally made maize, but FG did not know, because of poor policy advisers,

“They did not know that major distributors import maize as ordinary people can’t do, forgetting that when you just wake up, you can’t just bring a government policy that affects an industry overnight.”

He said the distributors usually take loans from Nigerian and foreign banks, to buy from cooperatives and associations abroad which is facilitated through banks, and there would be penalties for them, them, so they pass the costs to the customers, they look at the price and jack it up, knowing that that the birds, chicken and cattle must eat every day.

He urged that FG must understand the real value chain and that most of the “special advisers” don’t and have never done commercial agriculture.

(Nairametrics)