Egg prices will have to rise

Australian Egg Corporation Managing Director, Mr James Kellaway, said the price of grain—the single biggest cost in egg production—has increased by a staggering 77% over the last 12 months due to the ongoing drought in south and eastern Australia.

“We said in October last year that egg prices were likely to go up as a result of the rising cost of grain. Unfortunately the situation has only deteriorated since then, which means that further price rises are inevitable.

“The cost to farmers of producing a dozen eggs has increased by up to 40 cents per dozen since this time last year, representing a significant increase in the cost of production. Over the same period, retail prices of eggs have only increased by half this amount.

“Farmers have been working hard to increase efficiencies and absorb the impact of rising grain costs so that eggs remain the best value source of natural protein for consumers. But with differentials like this, egg farmers will be going backwards if some of these rising costs are not passed on,” said Mr Kellaway.

Mr Kellaway also said the current price and availability of eggs will continue to be influenced by Australia’s prolonged drought conditions—as will other fresh food staples dependent on grain, including pork, chicken meat and milk—even if the drought breaks tomorrow.

“The high cost of grain is unlikely to fall in the short to medium term, regardless of whether the drought breaks or not. This means cost pressures for egg production will be around until more grain becomes available, which may not be until the next harvest at the end of 2007.

“Last year’s winter grain crop was down by around 61% and the current summer crop is predicted to be down by 59% from corresponding harvests 12 months ago.

“With record shortages of grain worldwide and increasing competition from the emerging biofuels industry, there is simply not enough grain to go around,” said Mr Kellaway.

The Australian egg industry is committed to finding new ways to improve efficiencies and pass on cost savings while maintaining the highest standards of food safety, egg quality and animal care.

This commitment is demonstrated by the development and ongoing implementation of the egg industry’s national quality assurance program—Egg Corp Assured—a third party audited quality system that ensures farmers meet all relevant standards concerning animal health, food safety, animal welfare, environmental management, biosecurity and labelling claims.

“Despite the likely modest rise in price, eggs continue to be a convenient, nutritious, cost effective and versatile food enjoyed by millions of Australians every day,” Mr Kellaway said.