Karlee Dennien is not happy egg prices are going up.
Karlee Dennien is not happy egg prices are going up. Renee Pilcher

Price hikes no yolk

SATURDAY morning bacon and eggs might be about to break the bank.

The winds of the world's global economy are impacting on Australian farmers with Gympie egg prices likely to rise as a result of a drought in the US.

Australian Egg Corporation managing director James Kellaway said US corn and soybean crops were being devastated by their worst drought in more than a quarter of a century.

He said this was driving grain prices up in international markets.

"This will impact on the cost of producing a dozen eggs which will increase egg prices," Mr Kellaway said.

"Feed is the biggest cost in producing free range, barn-laid and cage eggs, more than 50% of the variable cost of egg production.

"The increase on the cost of production this situation could impose translates to up to an extra 50 cents at retail.

"Our grain prices are heavily influenced by the global production and trade in grain. Due to prolonged drought conditions affecting US crops, US wheat prices have risen to reach close to USc1000/bushel and are currently 40% higher than six months earlier with the recent price being to higher price levels."

Early signs for the Australian winter crop look promising but, given the US situation, the Australian crop will be traded at much higher prices and the market is already factoring this into grain prices to the benefit of grain growers but to the detriment of grain-reliant industries, such as eggs.

Mr Kellaway said some egg farmers were already buying grain at these much higher prices while others would soon need to renew grain contracts and with it, increased financial pain that would impact egg farmers' bottom line.

"This will need to be factored into the pricing of eggs given the slim marginsoperating in the production of eggs as egg farmers do not wish to compromise on the quality of feed grain provided to our laying hens," he added.

Gympie Times


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