Australia shoppers brace for years-long shortage and jump in prices after bird flu outbreaks

Egglab has put off price hikes for as long as possible. Finally, last week, the cafe reluctantly lifted the cost of some menu items by 50¢. Its popular Potato Head egg and bacon burger is now $15.

“With the volume we do, it’s gotten to the point where we have to,” Millett said. “We’ve tried to keep it to the things that have egg. Everything else is the same.”

Egglab prefers to use high-quality, free-range eggs, but given the ongoing shortage, the cafe has had to bounce between four suppliers just to source eggs – any eggs.

“Going from these guys one week to these guys another week, it’s definitely had an impact on the quality,” Millett said.

“We always strive to get the best we can, but sometimes there’s just precious little option in terms of what we can get and what we can’t.

“It’s very difficult.”

Happier times: Egg farmer Danyel Cucinotta.Credit: Jason South

How did we get here?

The recent outbreak of H7 avian influenza in four poultry farms in northern Victoria, combined with last year’s outbreaks of a different, since-eradicated strain in Victoria, NSW and the ACT, has resulted in more than 1.8 million birds being killed. Some estimate the true figure is closer to 3 million.

The outbreaks occur when wild birds, which may carry influenza without exhibiting it, interact with free-range chickens that become sick, have difficulty breathing and may develop partial or full paralysis. The outbreaks have not been a result of flaws in biosecurity, as free-range birds roam outdoors, where wildlife may visit. Diseases can also be inadvertently spread by humans through dirt on their shoes.

About 10 per cent of egg-laying hens have been eliminated from the national flock, with the effects cascading beyond Victoria into many regions across the country as the overall egg supply dwindles.

Farmers are on tenterhooks that their farms could be next. “Everyone’s walking around with crossed fingers, hoping that they won’t get it,” said VFF Egg Group president Meg Parkinson. “It’s just bad luck … There’s nothing you can do if those wild birds turn up.”

A carton of caged eggs, which would have been $6 to $7 about 18 months ago, has risen to $8 to $10, says Cucinotta. She’s seen a dozen free-range eggs sell for as high as $20.

But costs have been mounting since COVID, well before the recent outbreaks, as the Russia-Ukraine war put pressure on crucial feed costs such as grain, fertiliser and energy. Supply is also being choked at a time when demand is rising: health-conscious consumers are turning to eggs because they are high in protein and low in fat; cost-conscious consumers are swapping expensive proteins such as meat for the traditionally more affordable egg; and it is a staple of the diets of many migrants settling in Australia.

Traditional Georgian khachapuri with cheese and egg. Eggs are a staple in the diets of many migrant groups in Australia.Credit: Getty Images

Supply isn’t expected to normalise for at least six months – and that’s under the best-case scenario, in which the latest outbreaks don’t spread further and no new ones occur.

“That could happen as quick as maybe late winter, early spring, but there’s a lot of assumptions here,” said Matt Dalgleish, founder of Episode 3.

Cucinotta and her team are less optimistic. “You need two to three years minimum to see recovery [of the flock],” she said.

What’s that they say about eggs in one basket?

Frustrated egg farmers and industry observers say regulation is part of the problem, accusing governments of a lack of clarity on a proposed ban on caged eggs, which they argue will put further pressure on costs and ultimately result in higher prices at the checkout.

Australia’s federal and state governments have committed to phasing out conventional caged eggs by 2036. However, no detail has been released on when the phase-out will begin. The VFF has urged the government to extend this deadline by 10 years, and some egg producers are preparing for a potential class action.

“They’re not listening to the people within the supply chain, the experts, the farm representative bodies [whose] members are saying, ‘If you push us down this pathway of getting rid of caged eggs, we’re going to be more susceptible to things like bird flu’,” Dalgleish said.

Cucinotta says the ban will exacerbate existing shortages by removing an entire category of affordable protein. Caged eggs now comprise about 50 per cent of Australian egg production. Acknowledging animal welfare concerns, she said consumers should still be allowed to have the choice.

Supermarkets have previously stated they are committed to phasing out caged eggs this year.

“Right now, Woolworths and Coles are calling up every goddamn cage farmer in this country asking, begging for eggs on their shelves,” Cucinotta said. “They will take any eggs that they can get to supply their consumers.”

Moreover, egg farmers have to pay a levy for bird flu outbreaks, regardless of whether the outbreak has occurred on their farm. The government and the industry have an agreement that the government pays 80 per cent of outbreak costs, while farmers wear 20 per cent.

Cucinotta estimates the bill for 2024’s outbreak alone has run as high as $100 million. “Every single egg farmer has to be part of that cleanup. That’s also why egg prices have increased,” she said.

A Victorian government spokesperson said it worked closely with the agriculture industry to control and eradicate pests.

“The long implementation timeline for the new standards means there won’t be an impact on current egg supply, and we will work with farmers to ensure they’re ready by 2036,” the spokesperson said.

”The new poultry standards still allow for larger, furnished cages, it is only conventional unfurnished cages that are being phased out by 2036.”

NSW Agriculture Minister Tara Moriarty said egg supply issues were not a result of the caged egg phase-out.

“There is a broad understanding that the egg supply issue is because of the impacts of avian influenza, which has led to depopulation of egg layers in Victoria, NSW and ACT,” she said.

An Agriculture Department spokesperson said that states and territories were responsible for implementing industry standards for the phase-out plan, according to their regulatory frameworks.

“Timing for the implementation of the poultry standards, including for the phase-out of conventional cages, is a matter for states and territories,” the spokesperson said.