NZ's largest wholesale grocer warns customers of egg shortage

Monday, 8 July 2019

Breakfast lovers despair - an egg shortage may last for months.

Egg lovers may need to rethink their breakfast options as suppliers warn of an ongoing shortage of the pantry staple that could last until next year.

The country's largest supplier of wholesale food and beverages, Gilmours, sent out an email to its customers on Monday warning of the shortage.

In the email Gilmours, which supplies many Wellington cafes and restaurants, said new animal welfare requirements to remove intensive and small cages currently used in caged-egg production was causing a 'shortage of eggs' that was expected to continue over the short to medium term.

Eggs are getting harder to come by as law changes come into effect for farmers.

Gilmours told its customers the 'uncertainty around supply' stemmed from farms struggling to gain resource consent for new production with larger 'colony' cages while other egg suppliers 'exit the supermarket sector and/or industry altogether'.

* Shocking video of colony farm hens**

Under changes to the Animal Welfare Code of Practice, farmers have to transition their caged hens into larger 'colony' cages by the end of 2022.

Petone wholesaler has warned customers of an egg shortage.

Colony cages are large enclosures that can house up to 60 hens, allowing them to engage in natural behaviours like perching, with nesting areas and scratching pads.

But, behind the scenes, the ongoing change to animal welfare requirements is putting the updated practice at odds with what supermarkets will soon demand from producers.

Foodstuffs, the company behind New World and Pak 'n Save has committed to stocking only cage-free eggs after 2027 at the latest. North Island Countdowns will be cage free from 2024 and South Island stores will sell their last caged eggs by 2025.

Save Animals From Exploitation (SAFE) head of campaigns Marianne Macdonald said, 'We've been very clear signalling this to the industry for decades that caring Kiwis don't want hens in a cage, and because the industry ignored that we have worked with retailers, getting them to make cage-free commitments.'

She said any kind of cage was 'incredibly cruel' to hens and were 'the very worst' of all the systems housing them.

Forty per cent of New Zealand's 'conventional' cages, which house the hens responsible for just under 90 per cent of New Zealand's commercial egg supply, were required to be replaced with larger 'colony' cages by the end of last year due to the age of the cages.

Egg Producers' Federation said for most cage farmers, it meant they had to rebuild their farms from scratch, investing many hundreds of thousands to millions of dollars each.

Levin free range egg supplier Nick Bennick said the shortage was at its worst one or two months ago, when New Zealand's national flock numbers were down to about 3.5 million hens as cage farmers culled their flock to convert their sheds to accommodate colony cages.

'We start to have issues with demand an supply whenever the number sinks below 4.1 million. We're climbing back towards a normal flock number now, but I don't think we'll get there until December or January of next year.'

Bennick said he knew of two farmers that opted to leave the industry because it would have cost millions to convert their operations.

The Egg Producers Federation analysis found the amount of money farms would have to borrow or find elsewhere to finance a change to colony systems, including purchase of additional buildings and equipment, ranged from $660,000 for small farms to $8.5 million for large farms.

Early estimates indicate a cost to the 42 cage egg farmers between $45 million and $150m, which would likely increase in the cost of eggs.

New animal welfare requirements are forcing farmers to fork out millions to transition their caged hens to 'colony' cage systems.

Pak 'n Save will no longer stock caged eggs, including colony eggs after 2027.

Supermarkets are starting to warn customers of an egg shortage as farmers leave the industry amid reuqirements for larger cages, and supermarkets looking to phase out caged eggs altogether.

Statistics New Zealand recorded eggs at a record high of $4.43 a dozen in April 2019 following nine months of increases in price.

A colony egg, typically about 30 cents costs about 5 cents more than a conventional caged egg, but a free-range egg tends to be about double the price hovering at around 60 cents an egg.

Countdown head of perishables, deli and bakery Nikhil Sawant said egg supply was under pressure from a 'real surge in demand for barn and free range eggs'.

Gilmours and the Ministry of Primary Industries has been contacted for comment.