Eggs

Eggs icon
livestock

Eggs

Feature Image
  • Asset 2
    Output $269m est. Up 2% yoy
  • Asset 2

    Egg consumption is estimated to have risen by 3.4% yoy

  • Feed icon

    Price competition and rising feed costs challenged industry profitability

The industry faced very difficult operating conditions during the year. An oversupply in free range eggs with little reduction in caged egg production capacity forced down the price of all eggs in the market and accelerated the number of consumers switching to free range eggs. Oversupply and weaker pricing, combined with high feed costs representing 50% to 70% of producer’s input costs, placed producer’s margins under significant pressure. Towards the end of the year, farmgate prices started to improve but feed costs remained very high.

Charlotte teaching children about free-range egg production

NSW DPI’s Schools Program picture book series encourages agricultural learning in young children. ‘Charlotte’ is the second in the series and introduces children to free-range egg production including the ranging yards, feeding and how 84,000 eggs are collected and packed each day! ‘Charlotte’ joins ‘Bosley and Bruce’ who tell children about genetics and herd management, and will soon be joined by ‘Freda’ from Tocal dairy. The books are beautifully illustrated, colourful, and engaging and include information to support teachers in delivering knowledge about agriculture in everyday lessons.

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Layer hens in production

Download (.XLSX) Source: AUSTEGG (2018)

Production

Production is estimated to have increased during 2018–19. At the end of 2017–18, the number of layer chickens in egg production had increased by more than 13%, which had a significant impact on production during 2018–1935. Industry investment in new free range facilities, prompted by the introduction of a national mandatory legal definition for free range eggs in March 2016, contributed to the increase in layer chickens.

Per capita consumption increased by 3.4%94 as a result of lower retail prices and the continuing popularity of eggs as an affordable source of protein. However, this demand was outpaced by increased supply.

Price

The average retail price of eggs increased by 0.8% in 2018–1916. The price increase masked price falls in individual categories as consumers switched their preference away from cage produced eggs to higher priced alternatives, in particular free range, which now represent more than 50% of supermarket sales by volume and more than 55% by value74. The oversupply of free range eggs pushed the price of this category down, making it more affordable and encouraging consumers to switch from other categories, such as cage eggs. Towards the end of the year, the oversupply situation began to resolve resulting in some shortages in certain categories, improving farmgate prices.

Eggs average price

  • MAT to Oct 2016
  • MAT to Oct 2017
  • MAT to Oct 2018
Source: FARMPRIDE (2018)

Trade

International trade in eggs is small and can be volatile, often influenced by international disease outbreaks. NSW exports fell 25% during 2018–19, primarily as a result of a decline in exports to South Korea and the Philippines as their local industries recovered from avian influenza 87. Exports to New Zealand increased due to a shortage in local production as the industry struggled with adapting to new animal welfare standards phasing out cage produced eggs87.

Outlook

The relatively low farmgate price and high feed costs continue to be the biggest challenges facing the industry. Feed prices are unlikely to moderate significantly in the short term. However, an emerging shortage of cage eggs may provide some wholesale price relief for farmers. Resolving animal welfare debates around caged egg production, while maintaining and improving biosecurity controls, are also issues facing the industry. Domestic demand for eggs, however, remains robust and is expected to continue growing. Eggs remain an important and popular source of protein, especially for lower income families.

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