Japan

In Japan, layer farms with more than 1,000 birds have slumped in number from 5,390 in 1998 to only 3,460 in 2007. During this time, the laying flock has contracted from 145.3 million to 142.8m. However, egg output has increased slightly from 2.54 million tonnes (mt) to just under 2.6mt.

Back in 1998, 7.1% of egg producers with flocks of more than 100,000 birds accounted for almost 48% of all layers. Today, 11.5% of producers are in this flock size category and they account for 62% of the national flock.

Over the past two years, production costs have escalated as a result of increases in feed and fuel prices. Feed costs of ¥57,400 per tonne in July 2008 contrast with ¥42,600 in October 2006. About half this price increase has been offset by the official feedstuff price subsidisation system. It has been impossible to pass the jump in raw material costs on to egg prices.

Egg consumption stands at 330/person/year, making Japan number two in the world rankings behind Mexico. The cholesterol issue remains a major obstacle to expanding consumption. Since 2005, the Japan Egg Producers Association has held cholesterol forums in major cities and these have gone some way towards correcting misconceptions about cholesterol and eggs.

An outbreak of highly pathogenic avian influenza (HPAI) occurred in 2004 and the publicity drastically hit demand. Further outbreaks occurred until February 2007 though their impact on the market was far less severe.

The industry is trying to establish an Egg Clearing House to control surpluses, while animal welfare issues are being discussed with government.

Rules are being laid down for an egg labelling system under the guidance of the Fair Trade Commission.

China

China's egg industry is facing three main challenges. The first is the increase in shell egg prices which have risen rapidly since 2005 and are currently well above 2007 levels. Secondly, there is a need for customer education and technical support. In the past food companies have always broken out their eggs by hand, hence there is a problem of how to convince potential customers to try safe, processed egg products. This goes hand in hand with the third challenge of showing food manufacturers how to use industrial egg products as ingredients.

The safety of egg products for processors is dependent to a great extent on the level of management at farm level. Some producers are unconcerned by food safety so, in order to guarantee the quality of their supplies, large processors have built their own egg farms.

The government is going to introduce a Food Safety Law, which is aimed at ensuring food safety from farm to fork. When implemented this will greatly accelerate the use of processed egg products. Central government will also introduce a policy to improve the level of safety of shell eggs on farms.

Consumers prefer branded products and want safe food. This creates a market for branded shell eggs and safe egg products. Some food manufacturers are now accepting egg products as functional ingredients, giving a big potential in this area for new applications.

With modern processing equipment and technology, China can be competitive on world markets, particularly since the central government has plans to support agricultural exports through reimbursing duty payments.

Philippines

A key challenge facing the egg industry is the low per-capita egg consumption at only 73/year. Higher costs are also a concern particularly of imported feed ingredients and other inputs. Coupled with these cost increases is a level of overproduction that ensures that all farms are losing money.

Among other threats are the undeserved image of eggs in relation to cholesterol, inadequate policies and legislation to service the industry, the level of bio-security and imports of egg powder and frozen eggs.

Egg price distortion occurs because of inflexible pricing by retailers.

There is a growing domestic market with a projected population of 90 million by 2009. More people are eating out and there is the prospect of serving large institutional markets.

The Philippines is free from avian influenza.

There is potential for growth in further processing and new product development and also the possibility for exports. Improved and modified farm structures and equipment, plus the implementation of a management and technical skills development programme, should lead to increased efficiency.

Australia

Animal welfare is still a key issue in Australia. While welfare legislation had been introduced in January 2008, its enforcement was on an ad hoc basis creates anti-competitive forces through legislation in what is meant to be a free market.

Food safety is also important, the controls mainly targeting salmonella, which is important in terms of the public's perception of the health of agricultural products. Regarding freshness, the current Code of Practice requires that eggs have a best-before date that is five weeks after the date of lay. However, currently some traders are extending that time limit because of the difficulties of moving eggs over such long distances.

A survey has found that supermarkets, which hold a dominant position in the retail sector, are not abusing their position, a view that egg producers will challenge.

This country is now in its sixth consecutive year of below-average rainfall, which has impacted adversely on grain production. Currently, grain prices are 31% up on 2007, which was above the levels of the two previous years.

Chick placings have risen and egg production is at record levels. Nevertheless, prices have been maintained which indicates that demand has increased.

The industry is lobbying for the welfare and food safety legislation to be enforced on a national basis.

While 86% of consumers say that they buy free-range eggs, some 90% of consumption is cage eggs. While free-range production is increasing it currently represents only 16-18% of output.

The government is making a risk assessment on imports of eggs and products from a number of countries but this is not considered a priority and they are unlikely to review the position for at least four to six years.

New Zealand

New Zealand imports most of its layer feed requirements for its 3.3 million birds and hence prices of layer rations have escalated, particularly in the face of increased demand for feed from the other livestock sectors.

With more birds in lay, egg prices have been put under a downward pressure that has resulted in a crunch for the industry. Like most other countries, New Zealand has experienced an economic downturn. Normally the market picks up at this time of year because eggs are such good value for money. Unfortunately retail sales are 'flat', while the restaurant and café trade has also suffered a bigger downturn as people looked to save money by cooking at home.

They are reviewing the Code of Welfare for layers.

Macroeconomic pressure is leading to opportunities to re-awaken consumers to the benefits of eggs. Also, increases in the prices of other protein foods make eggs the perfect protein substitute. Increased consumer awareness to what they are eating has led to a back-to-basic food attitude into which eggs fit well.

Cage-free eggs account for about 15% of the market. But while the free-range sector has been growing, the market is driven by consumer demand and in the current climate, most consumers are looking for the cheapest eggs.

Further Reading

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You can view other reports from the IEC Annual Meeting 2008 by clicking here.

October 2008