Otago poultry producers are struggling to meet egg orders as the Ukrainian invasion and a decade-old law have crushed the industry.
Small egg farmers don’t have enough eggs left and have to say goodbye to cage farming or leave the industry.
Egg producers don’t expect any more profits as feed prices have risen dramatically while egg prices have risen.
Egg Producers Federation Chief Executive Officer Michael Brooks said the industry has undergone a “complete transformation” over the past decade.
In 2012 the government introduced Animal Welfare Regulations for Laying Hens, which must be changed within 10 years and battery cages will no longer be legal by the end of 2022. At that time, about 84% of producers used the cage method.
Now they have to redesign their business around colony, barn or free range methods, each with its own challenges and costs.
Many chose the colony method. The chickens were still housed in cages, but in groups of up to 60 with nesting areas, scratching poles and perches.
However, most major supermarkets have pledged to stop selling Colony Eggs by 2027 at the latest, and Countdown will stop selling Colony Eggs by 2025. Brooks said upgrading to a colony would cost millions of dollars, so staying in the industry isn’t worth it for many small producers.
One problem, he said, was the cost of feed, which has skyrocketed since Russia invaded Ukraine. Ukraine is a major wheat producer globally and it will be a long time before prices fall.
About 65% of egg production costs come from feed.
He said this is all due to Covid-19, which is already challenging small business owners. Grain costs are felt by growers throughout the region.
Pieter Bloem, co-owner of Bloem’s pig farm and poultry farm, said he used to pay about $450 per tonne of feed, but now it’s about $650.
The price of eggs had gone up, but he was no longer making a profit because the price of feed had gone up.
All the changes crowd out other producers and there was not enough supply to meet demand.
He had to limit his supply to commercial customers and there was little left. He tried to source eggs from other farms to meet demand, but he couldn’t get enough.
Quested Poultry manager Steve Quested said he was getting more and more calls from new customers and had to do it.
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Source: Otago Daily News