Rising egg prices still stuck in 1990s despite soaring farm costs

Farmers are angry egg prices in many supermarkets have been rising for months in line with other food costs, but retailers are not necessarily passing those payments down the line.

While red hot farm commodity markets have been celebrated by beef, lamb, grain and most horticultural producers, the egg industry calculates current average layer farmgate prices are barely different to the early 1990s.

"Like the consumer, we're now being hit with a lot of inflationary pressures, too, particularly higher grain prices," said NSW Farmers egg committee chairman, Brett Langfield.

"Shoppers have seen egg prices rise between 30 cents and 50c a dozen, but despite talking about trying to contain food inflation costs, supermarkets appear to be charging more for eggs while deliberately stalling on price discussions with producers.

"I think consumers would be quite disappointed to realise the big retailers are not compensating those who are bearing the higher production costs. It just stinks."

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Australians eat about 17.3 million eggs a day.

Mr Langfield, whose third generation family business near Young supplies about 500,000 every day, said grain costs on his farm were 20 per cent higher than a year ago and fuel costs up about 80pc.

Finished feed ration costs have been even higher for others - up 45pc on average to more than $500 a tonne - according to Egg Farmers of Australia chief executive officer, Melinda Hashimoto.

She said the industry had been swamped by a succession of rising cost pressures in the past five years.

These included steep grain costs during the drought; eastern Australia's mouse plague; COVID-19 disruption and supply chain cost rises coinciding with falling egg sales to hospitality markets; new government levies on farms to cover avian influenza controls; power price hikes; wage rises, and a 12pc jump in the cost of packaging, boxes and cartons earlier this year.

"Unfortunately the supermarkets have also quite openly admitted the changing price of eggs on their shelves does not accurately reflect what they pay producers," Mrs Hashimoto said.

Egg Farmers of Australia was hoping to build a stronger case with the Australian Competition and Consumer Commission to monitor the egg market more closely.

The ACCC's recent inquiry into perishable agricultural markets had not attracted many submissions from the industry, possibly because there was concern among big producers that future contracts with retailers and other big buyers could be at risk if much detail about current supply arrangements was disclosed.

Supermarkets take about 40pc of Australia's egg output, with the rest going to the hospitality sector or for use in baking and other food processing.

"I think it's only fair to expect Australians to get used to paying more for eggs and egg-based products, or else farmers will go out of business, or at least reduce hen numbers while feed and energy costs are so high," said Mrs Hashimoto, whose peak grower body represents cage, free range and barn laid egg farmers.

"However, I am aware there have been conversations between some suppliers and supermarkets, so the current situation may hopefully settle down before too long."

A representative from Woolworths Group confirmed many of its suppliers had requested price increases in response to higher production costs, and consequently the retailer was "paying millions of dollars more for eggs".

"Our increased retail prices have corresponded with higher payments to producers - we're working with suppliers to set sustainable prices," the spokesperson said.

"We operate in a highly competitive market, and never make the decision to increase retail prices lightly.

"We are also committed to fostering long-term, mutually beneficial partnerships with our suppliers so they can continue to provide quality produce to our customers for years to come."

Woolworths' prices start from $4.20/dozen, with suppliers to its Woolworths Own Brand locked into long term contracts which include an independent assessment of production costs to ensure farmers are appropriately compensated.

Coles is understood to be reviewing its response to urgent payment increase requests from its food suppliers, asking them to prove the extent of their production cost rises.

However, Mr Langfield said feedback from many mid-sized egg producers suggested retailers were "playing the delaying game a lot harder than normal".

Retailer claims about working with suppliers to set sustainable prices seemed pretty hollow.

"One of our members was told by their buyer there wouldn't be any discussion on prices until August," he said.

Meanwhile, the egg industry has just launched a new tool designed to help farmers trace eggs back from point of purchase to the date and location they were laid.

EggTrace was funded with Commonwealth Government funds to help improve food safety and security.

By creating full visibility on the path an egg takes from lay to despatch, farmers now have the ability to more easily and efficiently identify any quality or health issues affecting eggs.

In a recent survey of almost 6000 consumers 66.5pc indicated concern about Australia's food security.

Managing director of industry marketing and research body, Australian Eggs, Rowan McMonnies, said better traceability coverage would make the industry more resilient and improve food security.

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