We all know that Australia is experiencing a national egg shortage. Prices are rising and supermarket stocks are patchy. Supermarket giant Coles has reverted to COVID-19 conditions with a two-carton limit.
We became used to grocery shortages throughout the lockdowns of 2020 and 2021. These were due to changes in buying patterns, stockpiling and panic-buying. Eggs were temporarily part of this, along with flour, as people at home got baking. Food delivery, food boxes and home cooking exploded for a time.
But with lockdowns long past, what’s causing this egg shortage now? More fundamentally, our current shortage reflects a long-term trend in egg-buying preferences, with a shift to free-range eggs - and their production is more affected by the colder, shorter days of winter.
Australians consume about 17 million eggs every day. In the 2020-21 financial year, egg farmers produced about 6.3 billion eggs. Of those, 52% were free-range. This compares to about 38% a decade ago. This growth, however, has not been consistent. Between 2012 and 2017, free-range eggs’ share of the market grew about 10 percentage points, to about 48%. Growth in the past five years has been half that.
But with more rapid growth predicted, and the promise of higher profits, many egg farmers invested heavily in increasing free-range production. In New South Wales, for example, total flock size peaked in 2017-18. Like many agricultural industries where farmers respond to price signals and predictions, this led to overproduction, leading to lower prices and profits. This in turn led to a 10% drop in egg production the next year.
Compliance costs also increased when in 2018 the Australian Competition and Consumer Commission introduced rules to police the marketing of eggs as “free-range”. (These rules mean hens need to have “meaningful and regular access” to an outdoor range during the daylight hours of their laying cycle - with a maximum density of 10,000 hens per hectare).
Producing free-range eggs is more expensive not just because it requires more land. Free-range hens are less consistent layers. Hens kept in cages or barns are more regular producers because conditions are optimised to stimulate laying. Temperatures are constant, and hens are exposed to 16 hours of light every day.
Free-range hens are affected by hot or cold temperatures, wind and rain, and length of daylight. In winter months they have less energy and produce (on average) 20% fewer eggs than a chicken confined indoors in controlled conditions.
The egg industry is flexible and adaptable – but the confluence of economic and environmental events in 2022 has made things difficult. Increasing a laying flock takes about four months. An egg takes about three weeks to hatch. Under ideal conditions, chicks need another 17 weeks before they are ready to begin laying.
Any farmer who has begun this process in the past month will be producing more eggs by January 2023. (But then it will be summer, when they won’t need 20% more hens to make up for their winter slump.)
Feed costs, which typically represent 60-70% of layer production costs, have been increasing along with transport, electricity and interest rates. Weather forecasts foreshadowed a wetter August to October, with “more than double the normal chance of unusually high rainfall”. That meant less daylight and more cold along with rain. Blame the negative Indian Ocean dipole, not the chickens.
Come spring, with longer days and milder temperatures, along with an agricultural visa program, things should return to “normal”. For winter, consumers need to be willing to pay more to ensure a constant supply in winter months, or our shift to free-range eggs carries a higher likelihood of winter shortages.
We must do what we have done through every disruption in recent times: endure, adapt and prepare for the next crisis.Flavio Macau, Associate Dean - School of Business and Law, Edith Cowan University This article is republished from The Conversation under a Creative Commons license.