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Mar 16, 2023

When will the egg shortage finally end?

Eggs could be in short supply for months if supermarkets do not extend the

Eggs could be in short supply for months if supermarkets do not extend the deadline for farmers to change the way they house chickens, the industry's association warns.

In 2012, the Government committed to a cage free industry by 2022. This meant battery cages, where chickens were kept in cages so small they could barely move, would be phased out.

Farmers were given three housing options to convert to; free-range, which allowed chicken to roam freely most of the day, barn raised where chickens could roam but were still indoors, and colony housing which were large cages housing a number of chickens.

Many farmers had made the change to colony cages, but in 2017 Countdown and Foodstuffs, owner of Pak ‘n Save and New World supermarkets, announced they would buy only from free-range or barn raised farms, with a deadline kicking in about 2025.

READ MORE: * Egg shortage isn't because NZ's farmers are silly and lazy * Countdown cuts caged eggs from five supermarkets * NZ's largest wholesale grocer warns customers of egg shortage

Supermarkets said consumers wanted better animal welfare, and colony cages did not meet those welfare standards, despite the Government's tick of approval.

But Poultry Industry Association executive director Michael Brooks said a third of battery cages had already been converted to colony cages by 2017.

These changes came at a massive cost and farmers could not spend more money to again change housing infrastructure on farms, he said.

It was "hard not to see some supply issues" until the time when supermarket suppliers would all be converted to free-range and barn systems, Brooks said.

Shortages would be possible because supermarkets bought eggs only from two thirds of egg producers, he said.

Those producers had already made the switch to barn raised systems, or were free-range, he said.

The remaining third were producing eggs in colony systems.

Brooks said he could not understand why supermarkets went against the National Animal Welfare Advisory Committee's recommendation that colony cages had acceptable animal welfare standards.

There were mixed messaging from farmers about how much discussion supermarkets had with them to make transitions, with some saying there were adequate discussions and others saying there weren't, Brooks said.

The association had tired to establish a dialogue with supermarkets about the way forward.

Countdown said it would get back to the association, but Foodstuffs did not respond, Brooks said.

Brooks believed supermarkets would not change their mind on the decision to be completely cage free, but might be convinced to push out the deadline when they realised how long transitions to new housing systems took.

Last year free-range and barn eggs collectively sold more than colony and caged eggs at supermarkets, by a small margin, Brooks said.

But one of the country's largest egg farmers said the egg shortage could be over by the end of the year as farmers bought more chickens.

Better Eggs chief executive Gareth van der Heyden said hatcheries were producing more birds eggs over the next four or five months, when chickens were old enough to lay eggs.

Better Eggs supplied 23% of the retail market and had recently bought enough chickens to increase egg production by 25%, he said.

Egg prices could come down when there was more supply on shelves, he said.

The market had been oversupplied for the past two years when the border was closed and demand from hospitality dropped, but chickens kept laying eggs.

Coupled with high inflation that pushed up the cost to farm, and farmers knowing they had to transition to new housing systems to meet supermarkets requirements soon, they stopped buying hens, he said.

Supermarkets had stayed in communication with farmers about the changes, he said.

A Countdown spokesperson said the challenges with supply reflected a disrupted couple of years for farmers, with Covid-19 causing significant peaks and troughs in demand, the war in Ukraine resulting in feed prices spiking, and supply chain disruptions that made it challenging for farmers to source building materials to build new farming systems.

Egg supply was expected to improve in the next few months, the said.

Countdown had worked with farmers since 2016 to prepare for the phasing out of battery and colony caged eggs, the spokesperson said.

"In 2016 we established our Egg Producer Programme which guarantees our farmers that if they invest in barn or free-range farming systems, we’ll buy those eggs."

The supermarket made the decision with the support of farmers, and against a backdrop of changing customer shopping habits as well as rising animal welfare standards.

"Since 2016 we’ve seen a 93% increase in customer demand for cage-free eggs," the spokesperson said.

Foodstuffs spokesperson Emma Wooster said after consultation with experts in 2017 the supermarket co-operative made a commitment to stock only cage free eggs by 2027.

Demand for eggs remained consistently high, Wooster said.

Foodstuffs was clear on its position with the industry for over five years, because the company understood the industry needed certainty, Wooster said.    

"Our teams are working hard to support our egg suppliers.  We’ve got good relationships and are committed to working with them to navigate what is a well signalled, big change for the industry," she said. 

Neither Countdown or Foodstuffs answered questions about how much egg sales decreased this year compared to the previous two years, and whether there would be shortages until the transition to new housing systems were completed.