Domestic price of eggs

IBISWorld expects the domestic price of eggs to expand 12.0% during 2024-25 to total 112.0 index points. The primary driver of this hike is multiple outbreaks of avian influenza in Victoria, New South Wales and the Australian Capital Territory. This biosecurity concern necessitated the slaughter of around 2.6 million birds, most of which occurred at commercial egg farms. Fewer egg-laying hens resulted in a discrepancy between supply and demand, driving price inflation. This price hike followed the 2022 and 2023 calendar years, where a national egg shortage developed in Australia because of a combination of volatile demand conditions, increased prevalence of free-range eggs and unfavourable weather patterns. Farmers have been reticent to expand flock size in this uncertain and volatile environment.

The domestic price of eggs has increased over the five years through the end of 2024-25. The types of eggs purchased have changed significantly over the period, which has inflated the cost of production and reduced average yields in the industry. Increasing concerns for animal welfare have resulted in a growing share of consumers purchasing higher-value free-range, biodynamic and organic eggs rather than cage eggs. These producers are typically less productive and more reliant on fluctuations in weather. Cage egg farms keep hens in a more controlled indoor environment, which is optimised to stimulate laying. Welfare concerns have also resulted in legislative changes, which have increased compliance costs for both free-range and cage egg producers, necessitating upgrades in facilities and equipment costs. Innovations like the 'Fitchix' tracker, designed to track the chicken steps, have provided consumers with enhanced transparency and reassurances about animal welfare. Yet, they have also lifted egg prices because of the additional costs of technology and sustainable farming practices. These factors have contributed to increasing egg prices over the period.

The national standard developed in March 2016 regarding free-range eggs requires that farmers not exceed 10,000 hens per hectare to label their eggs as free-range. As this greatly exceeds the previous CSIRO voluntary limit of 1,500 hens per hectare, the upwards pressure on egg prices exerted by shifting consumer preferences for free-range eggs has been weakened. As a result, farms that allow more than this minimum requirement have faced greater price competition from large-scale free-range egg farms that keep 10,000 hens per hectare. This has partially slowed price growth, resulting in a higher demand for free-range eggs. However, in 2018, the Australian Competition and Consumer Commission (ACCC) introduced new rules that further policed the marketing of 'free-range' eggs, which added additional costs to producing free-range eggs. Overall, IBISWorld forecasts the domestic price of eggs to increase at a compound annual rate of 9.9% over the five years through 2024-25.