[As published in March/April BayBuzz magazine.]
The current egg shortage is the result of major farming changes as the industry moves to cageless systems.
The change has been accelerated by retailers, wholesalers, fast-food chains, and manufacturers as they target 2027 as the year they will no longer sell, distribute, or use eggs other than those produced from cage-free systems, namely barn and free-range.
This decision and its declaration have been a blow to the 30% of the New Zealand industry that has invested in the colony-cage system, believing they had more time before the complete banning of cages. Colony cages are large cages within which hens have access to perches, nest-boxes, and scratch pads. They have more room than in the old battery cages (outlawed 31st December 2022) and are thus able to stretch their wings.
A steppingstone en route from battery cages to barn and free-range production, the colony system is often able to be retrofitted into existing cage sheds. This negates the need for land purchase and construction of new cage-free farms.
Despite the colony system complying with the Animal Welfare Act, it is still a cage system. And it’s not what the group of large customers – who are calling the shots – want. The animal welfare lobby is relentless and powerful and will move their attention onto colony systems now the batteries have gone. All power to them. We don’t get better eggs from cage-free systems, but we certainly get a little warmth from knowing the hens have better lives.
Supermarkets, foodservice operators, fast food restaurants and manufacturers have made ‘Cage-Free’ commitments to their customers without their customers asking for it. While supermarkets are being highlighted because they are the most visible, the change is happening across many major egg users. This is causing the egg shortage. And arguably, the price gouging felt by the end consumer.
New Zealand producers are looking at offshore trends with the growth of free-range and the number of customers who will stop buying colony eggs here in the next few years. Barn production is the next step to the eventual endgame of total free-range, but it hasn’t gained much traction overseas. Farmers, therefore, are reluctant to invest in barn production as they feel there is uncertainty around the longevity of the system given its slow growth and the rejection of the colony system by egg users here. Barn sales in British supermarkets account for 2% compared to free-range sales at 74%. Traditionally, NZ follows UK and EU industry trends.
The likely conclusion is that free-range is the best format to invest in to ensure longevity for New Zealand egg farmers’ businesses. The cost of developing a free-range egg farm is at least $180 per hen space, and to service the egg needs of NZ there needs to be about 4 million hens in production. These are very large capital decisions often being made by family businesses.
Today’s shortage, which will be with us for at least six months, was created by the closure of battery farms and the slow pace at which those laying hens are being replaced by cage-free birds. This is made even slower by the hesitation of farmers due to the uncertainty of future market demands. It’s not just a case of opening the cages and letting the hens roam free.
Fresh egg imports are prohibited into New Zealand due to our low disease status and eggs are in short supply across the world even if we could import them. So, we’ll have to ride this one out and expect to pay more due to that old supply-and-demand equation.