Cracking news: Eggs about to start flowing again

Egg producers say the little golden hits of protein are about to start flowing at more normal rates again, however the future of egg farming in Australia is far from secure.

Extreme labour shortages are piling up on top of big cost of production rises to make farmers seriously consider their future in the business.

Add to that hold-ups in higher retail egg prices flowing back to the farmgate and many producers are being squeezed close to the point of being unviable.

Throw in the costs that will be involved with moving to cage-free egg systems and there is little doubt more price rises for consumers are on the way.

Eggs have gone up as much as 25 per cent in retail outlets in the past three months as supplies dwindled on the back of farmers reducing their laying stock in reaction to less demand.

While retail egg purchases skyrocketed during the pandemic when people started cooking at home more, food service sales fell off a cliff.

NSW Farmers egg committee chairman Brett Langfield explained the gap in demand occurred when cafes and restaurants did not ramp up quickly once lockdowns were over - cautious that more pain was to come.

"But the home shoppers run was over, so we saw a 20 per cent decline in egg sales which on a perishable product is a real problem," Mr Langfield said.

"Producers couldn't be sure if this was short term or the 'new normal' so many destocked to reduce risk.

"With chickens, it takes at least five months to get back in production, so as an industry we've been catching up slowly and most are now very close to where they were."

With 40pc of the industry now free range, the colder-than-average winter also slowed laying and exacerbated the egg shortage.

ALSO SEE:

At the same time, producers have been hit with input costs rising at never-before-seen levels, which also contributed to a hesitancy or inability to restock hens as quickly as might otherwise have been the case.

Egg Farmers of Australia boss Melinda Hashimoto said the speed of rising farm input costs required to raise hens and produce quality eggs was so alarming some long-term farmers were genuinely fearing for the future of the industry.

Costs of laying hens were up 20pc, fuel prices jumped 25pc at the worst point, feed grain costs rose by 45pc and the cost of canola oil to add to feed climbed a massive 140pc. The cost of packaging and egg cartons has also shot up.

Fuel and grain have come off somewhat but not enough to provide decent relief for farmers, Mr Langfield said.

"Even more worrying, however, is the complete inability to source labour and the big increase in what it costs when you can get it," he said.

"Without labour, there is absolutely no ability to expand, despite increasing demand for eggs."

Producers have also reported retailers have been very slow to pass on increases in retail prices.

It was only now that even some of that higher supermarket money was starting to come back to the farm, Mr Langfield said.

AN on-farm shop was the saving grace for third generation NSW egg producers Michael and Mariela Galea, who have 24000 hens in production at Llandilo Farm in Penrith.

Sales at that little shop skyrocketed during the pandemic as consumers sought out locally-produced healthy food options that didn't require a visit to big stores.

With the volumes Llandilo Farm normally sent to cafes, restaurants and providores in Sydney severely reduced, Mr Galea said he would have been in a lot of trouble without the on-farm shop.

Llandilo produces both barn and free range eggs and has been able to retain its levels of production throughout the past few years.

However, Mr Galea said rising costs of production were now biting very hard.

"Everything you touch is inflating in price and while the retail price of our eggs has lifted a bit, it has not been to the degree of the cost rises," he said.

"We've absorbed a lot of the cost pressure with our shopfront eggs because chopping and changing prices turns customers off - we are trying to ride out the storm.

"Staying relatively small has also been to our advantage."