Domestic Price of Eggs

IBISWorld expects the domestic price of eggs to increase 2.2% during 2023-24, to total 122.0 index points. The primary driver of this increase is rising inflation, which has increased the cost of production and necessitated a sharp increase in prices. In particular, a sharp increase in the cost of feed and packaging is likely to drive up prices. In addition, a discrepancy between supply and demand has driven further price inflation. Demand has risen following the easing of COVID-19 restrictions, particularly from hospitality, especially cafes and restaurants that typically use a lot of eggs. More pertinently, during the 2022 and 2023 calendar years, a national egg shortage developed in Australia due to 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 past five years. 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.