Poultry – Eggs
Egg consumption in New Zealand has increased by 50 percent over the last 20 years, showing a robust industry. From an annual consumption of around 61.5 million dozen eggs per year in 1995, New Zealanders consumed 93.8 million dozen eggs in 2016 with the retail sales of eggs worth upwards of $286 million.
New Zealand currently has around 146 egg farms. Conventional cages account for the majority of eggs produced (75 percent), while the remaining eggs are farmed in barns (5 percent) or free-range (19 percent). Organic eggs make up around 1 percent of eggs produced.
Farming using conventional cages is due to be phased out by 31 December 2022, and replaced by colony cages. Colony cages retain some of the advantages of cage farming, such as higher levels of hygiene and relatively efficient low-cost egg production, while also creating more space for hens to move around and express their natural behaviours.
Barn and free-range egg farming are increasing in popularity due to public concerns about hen welfare in cages, and consumer demand for cage-free eggs.
The move towards cage-free egg farming has been given impetus by announcements in 2017 by the two main supermarket chains in New Zealand – Progressive Industries (Countdown supermarkets) and Foodstuffs (NZ) Ltd. (New World, Pak ’n’ Save supermarkets) – that they will only buy cage-free eggs in the future – Progressive from 2024 and Foodstuffs from 2027. This change may produce opportunities for more free-range producers and other investors to enter the industry, particularly if some existing cage-egg producers use this structural change to the industry as a reason to exit or reduce their holdings.
A move toward cage-free eggs would increase the general pricing on eggs, as low-cost cage-produced eggs would no longer be available.
Eggs are well known for providing high protein at a low price, and New Zealanders are now eating around 226 eggs per person per year. Up to 85 percent of commercially farmed eggs are sold as ‘table eggs’, with the remainder used in the baking and catering industries.
Table eggs are divided into: caged eggs, colony eggs, barn-raised eggs and free-range eggs.
Retail prices vary considerably due to the size, brand and weekly specials, however when bought in one-dozen packs, prices are generally :
- Caged eggs: $3.24–4.44/dozen
- Colony eggs: $6.00/dozen
- Barn or free-range eggs: $6.96–9.00/dozen
- Organic: $12.00/dozen
 Average supermarket retail pricing
The majority of commercial layer hens in New Zealand are either the Hyline Brown or Brown Shaver variety. Both are brown-feathered with some white plumage, especially in the tail. These hens will lay around one egg each day, and are capable of laying until up to 80 weeks of age. Commercial layer hens are special birds, chosen for egg farming because they lay more high-quality eggs than many other breeds. In New Zealand, around three million commercial layer hens are produced each year. Their breeding is managed by poultry breeding companies to ensure the hens are the best they can be and to keep up with international genetic developments.
The layer hen diet consists of feed made from mainly wheat, maize, corn and soybean meal or bone meal. Hens must also have ready access to clean drinking water. The exact composition of the feed will depend on the cost and availability of these ingredients to farmers, but must comply with the requirements of the Agricultural Compounds and Veterinary Medicines Act 1997.
Poultry feed and premixes are approx. $1.00–1.40/kg, and make up a big component of the farm budget.
Hens produce most when they are warm, so the nesting areas need to be heated, especially during winter months.
Depending on the type of farming undertaken, there will be requirements for a shed fitted either with colony cages, or a barn with a litter floor, fitted with nest boxes for egg laying and perches for roosting and sleeping. The marketing term ‘cage-free’ is often used to describe barn farming.
For free-range farming, birds require access to the outdoors through pop-holes in the shed walls.
Infrastructure includes barn/sheds, feed silos, feed lines and related feed equipment, watering system, poultry feeders, environmental control equipment, etc.
If egg farming is cage-free, then a cost-effective system to collect eggs must be developed. Barns/sheds can contain 5000 or 10,000 or more hens.
On a free-range farm, because hens can range outdoors, they are more vulnerable to disease, predators, parasites and weather, so close monitoring and other preventative measures are very important in managing the health and welfare of free-range flocks.
Preventing disease and illness through good hygiene practices and regular monitoring is a priority for egg farmers, who carry out daily checks on their hens to ensure they are in good, healthy condition and to identify any signs of injury or illness that need attention. Antibiotics are only used in layer hens when prescribed by a registered veterinarian to treat diagnosed illness.
Cage farming methods have been shown to reduce the instance of disease and illness in birds, although there is growing opposition to cage farming.
In terms of the maximum indoor stocking density for barn-farmed hens:
- NZ Code of Welfare: 7 hens/m²
- NZSPCA: 7 hens/m²
- EU standard: 9 hens/m²
In terms of flock sizes for barn-farmed hens:
- NZ Code of Welfare: Not specified, dependent on individual size
- NZSPCA: 5000 hens per enclosure
- EU standard: Not specified, dependent on individual farm land size
For free-range hens, the maximum outdoor stocking density is 2500 hens per hectare.
No research is available for nitrogen leaching on poultry farms, however it is not considered to be in the high range. Any land use change to poultry farming planned for the Lake Rotorua catchment would need to be modelled for nitrogen leaching.
Capital investment in a poultry layer farm depends on the size of the farm, and would be significant. A barn with an estimated building cost of $400–600 per square metre would equate to approximately $500,000 for a 1000-square-metre barn fitted out with cages or nest boxes/perches to house 5000 hens. Feed silos, watering lines and environmental control equipment would be additional. Five thousand brown shaver hens @ $5.00 each would be $25,000.
Commercial layer hens lay around 280 eggs each per year. For 5000 hens, this amounts to 1.4 million eggs or 116,667 dozen per year. For cage-free eggs retailing at $7.50 per dozen, this equates to revenue of $875,000 at the retail level.
Supermarket profit margins on eggs are commercially sensitive, therefore accurate farm-gate returns can’t be listed here. However, a hypothetical sensitivity analysis for a year’s shipment of 116,667 dozen cage-free eggs that retails @ $7.50/dozen provides an idea of what farm-gate returns may be:
Therefore, a gross return to the farmer may be $350,000–700,000 for this year’s shipment of cage-free eggs. Other factors and charges would also need to be taken into account. For example, not all eggs produced would be of the same quality, retail pricing varies throughout the year, more popular brands may receive better pricing, different supermarkets would have different supplier arrangements, etc. However, this gives a general idea of a range of returns.
 Costs estimated using Lincoln University Financial Budget Manual equivalents
Poultry Industry Association of New Zealand
Egg Producers Federation
Michael Brooks, Executive Director
E: firstname.lastname@example.org / email@example.com
T: 09 520 4300
Poultry Management in New Zealand, MAF 2011 (http://www.mpi.govt.nz/document-vault/2956)
‘Countdown extends free-range egg pledge to include all brands’, Stuff, 28 Mar 2017 (http://www.stuff.co.nz/business/90950403/countdown-extends-freerange-egg-pledge-to-include-all-brands)
‘New World, Pak’nSave to stop selling caged eggs by 2027’, NZ Herald, 21 Sep 2017 (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11924902)