Weather News

Supermarket egg imports will force WA farms already struggling with feed prices to close, industry body warns

By Richard Hudson and Joanna Prendergast, Wednesday November 7, 2018 - 22:39 EDT
ABC image
Fee range egg farmers say they're not immune to the impact of increased grain prices. - ABC

The growing number of imported eggs on WA supermarket shelves is threatening the viability of an already struggling local industry, egg producers are warning.

It is a difficult time for producers who say they are grappling with higher feed costs, lower prices, uncertainty around industry standards and now increasing competition from interstate suppliers.

Golden Eggs is WA's largest egg producer and marketer. Its six farms produce about 750,000 eggs per day in free-range and caged systems.

Managing director Peter Bell said the state's industry was under immense pressure.

"We recently lost a contract to supply eggs to Coles who are now bringing a lot of free-range and caged eggs into WA from the eastern states," he said.

"Woolies [Woolworths] is still stocking mostly WA-produced eggs.

"I've been involved in egg production all my life and this is the toughest period I've been through."

Mr Bell said had led to an oversupply in Australia.

"In this transition period, there has been an increase in free-range egg production but no real decrease in the number of caged or barn laid eggs appearing on supermarket shelves," he said.

Coles would not disclose how many of its free-range and caged eggs sold in WA supermarkets were from WA.

In a written statement, Coles said it supported WA farmers and regularly sourced fresh produce from WA for sale in other states.

"The majority of eggs sold by Coles in Western Australia are sourced from WA farmers," the statement said.

"Coles reduced the price of Coles brand free-range eggs nationally in June 2017."

Egg industry 'treated like the milk industry'

Joseph Sacca at Forrestdale Farm Fresh Eggs has been a commercial caged egg producer for almost 30 years.

He said when he began in the industry he was receiving $2 a dozen.

Recently he received $1.20 a dozen.

"We can't can't increase our prices because supermarkets request prices below last year's prices, and you cannot go below last year's prices. It's impossible," he said.

"They're treating the egg industry like [they did] the milk industry.

"All caged eggs that Coles [in WA] sells, they're all eastern states eggs.

"There's not much you can do. I know that for some of the people who supply the industry now, they've got to be careful not to complain because if they complain their contract is cancelled."

Coles disputes that all its caged eggs are from the eastern states but has not provided figures.

Egg Farmers Australia chief executive John Dunn said eastern states eggs on WA supermarket shelves would damage the WA egg industry, which produces about eight per cent of Australia's eggs.

"If it continues I'd suggest it has the capacity to compound what's already occurring," he said.

"Some farms are facing the very real prospect of shutting down, and if egg farmers in Western Australia continue to have the market flooded with eggs from the east then I'd say the risk of farms closing is increased ten-fold.

"It's a lot of farms, a lot of eggs, and it's also a lot of jobs. All of those things would be on the line."

Mr Dunn said supermarkets and egg farmers could work more collaboratively, and the industry has recently called for an egg price increase.

"If there is an egg farmer making money right now, I haven't met them," he said.

Clear industry direction needed

In March this year the Western Australian Government called for a 10-year phase-out of conventional cages for egg-laying hens in its submission to the draft Australian Animal Welfare Standards and Guidelines for Poultry.

Instead, WA Agriculture Minister Alannah MacTiernan called for new minimum standards to ensure any new cages were enriched or 'furnished', which contain features like perches and scratch mats.

Mr Sacca said supermarkets and consumers seemed to be leaning away from caged eggs entirely, and this was making the decision of whether or not to invest in enriched cages very difficult.

Aldi and Woolworths have made the commitment to phase out cage eggs by 2025, while Coles plans to stock only cage-free eggs by 2023.

Mr Sacca said industry needed clear direction over what type of eggs would be supported by supermarkets and governments.

Nonetheless, he has taken what he called the risk of investing in enrichment cages, but said it was very expensive.

He had already spent $11.5 million dollars to fully renovate the whole farm to current government standards.

Golden Eggs' Mr Bell agreed it was a difficult decision to make.

"As far as I know, Joe Sacca is the first egg producer in Australia to invest in enriched cages, but some supermarkets and animal rights groups are saying they're still cages so they're not acceptable," he said.

High feed price adds to pressure

Record high feed prices on the back of the drought in the eastern states is adding to the pressure on egg farmers' margins.

Ian Wilson is paying $1,000 extra a week to feed his 14,000 birds at his free-range egg farm south of Perth.

"I would say it is as tough as it has ever been at the minute," he said.

"Getting margins from the bigger retailers is very hard, they're shareholder-driven and unfortunately it comes back to the farmers to bear the brunt of a lot of the cost savings that they make.

"This is the highest we've ever had to pay for feed, when there has been any price hikes in the past it has never been to this level.

"There is definitely a point where you can't wear the cut in profit any longer and we have to put the prices up otherwise we can't pay our creditors."

Peak body also forced to lay off staff

Egg Farmers of Australia is the national representative body of its producers, representing about 85 per cent of egg farmers.

It is voluntarily funded by industry and in the wake of the drought and high prices contributions have dried up.

CEO John Dunn said this meant the group could not afford to retain his role and that of administrative assistant Angela Griffin.

However, Mr Dunn said the organisation was determined to retain its role in lobbying government and representing industry, but this would now have to be done by the member board.

"What makes hard times harder is when solutions are really limited, and that's the situation that makes this a genuine crisis," he said.

"No-one controls the rainfall that comes out of the sky, but everything in every person's pantry relies on that occurring on a regular basis.

"This drought can't be fixed and the pressures on farmers will continue for some time.

"I would suppose if they [egg farmers] were paid more, and the payment reflected the fact that they are spending more to produce those eggs, then there is a sustainable future that doesn't force a number of farms to close.

"That is the unfortunate reality that everyone is trying to grapple with."


© ABC 2018

More breaking news

Sydney Morning Herald
ABC News
National Nine News
News Limited

Display Your Local Weather

Weather News

New Agriculture Minister, Senator Bridget McKenzie, considers practical drought responses

18:48 EST

Australia's new agriculture minister has distanced herself from the National Party leader's policy to pray for rain.

Japan sets new May temperature record

18:14 EST

A brief burst of early-season heat in northern Japan set a new national maximum temperature record for the month of May on Sunday.

Snowy end to autumn transforms Australia's ski resorts

11:57 EST

Australia's alps are being covered with fresh snow just two weeks out from the start of the 2019 ski season.