Egg Producers denouncing unfair competition crisis

Costa Rican egg producers say that they have been mired in a crisis for the past year and half. Their concerns grow out of market prices that are coming in at well below the cost of production. The source of this crisis, they claim, is an excess of unfair competition.

One possible explanation is the alleged smuggling of eggs from Panama, in volumes that saturate the market and depress prices. However, the validity of this assertion is still under investigation.

Industry leaders, William Cardoza, CEO National Poultry (Canvia); and Carlos Morales, Director of National Poultry (Canavia); Hector Campos, Heccam Poultry; and Anthony Miranda, Santa Marta Poultry manager, agreed that producer prices have fallen to 700 cents per kilo.

That value is well below the 1,050 cents per kilo which would pay the cost of production and to achieve a slight profit, explained Miranda and Campos.
According to Miranda, the problem is such that in some periods the farmers are accepting values at 400 cents per kilo.
The egg industry is customarily characterized by a cyclical pattern: the price goes down when there is overproduction, but then levels off and prices rise.

These cycles typically last up to a year, according to producers. Over time, producers have learned to adapt to these conditions. But on this occasion, over the period of a year and a half, the market has not been able to recover to a reasonable level, due to repeated reductions in price offerings.

Farmers have increased the asking price several times, but within a week the rebounding price falls off. Mysteriously, there are a lot of eggs flooding the market, they said.

In this situation, the producers made a preliminary investigation on the southern border to detect illegal trafficing. This investigation received the support of the National Health Service (SENASA), however, the investigation failed to prove the smuggling.

Ligia Quirós, head of SENASA, said there is a concern that there exists the possibility of the eventual spread of avian disease that currently does not exist.

Source: La Nacion