Finance Your Budget Egg shortage means you’ll pay more

Egg shortage means you’ll pay more

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The egg shortage will lead to higher prices for consumers as farmers take the opportunity to look beyond major supermarkets in search of better deals.

Bede Bourke, an egg farmer from Tamworth in NSW and chair of the egg division of the NSW Farmers Association, told The New Daily that the shortage should give farmers better leverage with the big supermarket chains when contracts are negotiated.

“I would expect to see discounted caged egg prices rise from $2.50 a dozen to $3.50 and free range eggs from $4.50 or $5 to $5.50 a dozen in supermarkets,” Mr Bourke said.

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While farmers are often locked in on price with contracts to the supermarkets, they “don’t guarantee supply” – meaning they can choose to sell to buyers offering more.

This in turn is likely to see the supermarkets pay more to ensure supply over at least the next three months until spring.

Causes of the shortages

Aside from price negotiations, there are a number of other factors driving the current egg shortage, including Australia’s growing love affair with the food.

Ten years ago, Australians consumed about 150 eggs each a year. This has rocketed to 225 per person, in part driven by the growing trend to eating breakfast out.

Then there is the move to free range eggs as animal rights and health concerns push consumers to change their buying habits.


Free range share rocketing

Five years ago, free range eggs accounted for 10 per cent of the market. Now it’s 35 per cent and growing.

The politics around free range eggs is helping create the shortage.

Earlier this year, Consumer Affairs ministers nationally agreed to a regulatory framework defining what could be considered “free range” eggs.

Is that chook free range? Photo:AAP
Is that chook free range? Photo: AAP

That definition says free range eggs must come from hens that have meaningful and regular access to an outdoor range, with a stocking density of up to 10,000 birds per hectare allowed.

It ended a heated debate where consumer and animal welfare advocates wanted a limit of 1500 hens per hectare, but Commonwealth and state legislation necessary to implement it hasn’t been put in place.

“Farmers want to see the legislation in place before they invest,” Mr Bourke said.

That lack of investment means free range production is not keeping up with growing demand.

Debate about the future of the caged egg industry is also creating uncertainty with the big three supermarkets planning to ban caged eggs between 2018 and 2025.

That uncertainty means “the caged sector has stopped investing”, says Brian Ahmed, president of the Victorian Farmers Federation egg group.

But despite the popularity of free range, caged egg demand is also growing, up 5 per cent in the last quarter.

Hens hit by winter chills

Another factor in the egg shortage is the nature of free range farming where hens are exposed to the elements for periods of time, dramatically reducing egg production winter.

Aussies love breakfast out. Photo:AAP
Aussies love to eat breakfast out. Photo: AAP

Hens lay eggs every 28 hours, but this can drop to once a week or less when they are exposed to very hot or cold conditions, according to egg producers. So as free range increases in popularity, egg supplies increasingly fluctuate.

Australians eat about 18 million eggs a day with demand being higher in winter. The big three supermarket groups – Coles, Woolworths and Aldi – account for about half of sales with the rest going to smaller outlets, often with higher prices.

Woolworths blamed the shortage on seasonal factors and changes to the law in a statement provided to The New Daily.

“All major food retailers are experiencing an egg shortage, which is particularly felt in the southern states due to seasonal factors given the colder weather impacting on supply,” the statement said.

“In addition, recent government changes to the definition of ‘free range’ is placing pressure on all egg ranges as producers adjust to these new labelling requirements.

“We are working closely with our suppliers to ensure we meet demand as best as possible across our stores and we expect to return to normal supply in coming weeks.”

It appears there is no shortage at higher priced outlets. Jane Adams, spokeswoman for the Australian Farmers’ Markets Association, said: “There is no shortage of eggs being reported by farmers markets.”

There are over 170 farmers markets nationwide. Free range eggs there average about $7.50 a dozen but can go to $8 or higher.

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