Egg shortage and rationing: Bakeries and cafes left scrambling

Some cafes have taken egg sandwiches off the menu because they can't get regular supplies. Picture / Babiche Martens.

Bakeries and wholesalers nationwide say egg supplies have dropped to new lows, with businesses having to ration supplies and cut menu items.

Dunedin’s Bakehouse on Bond owner Tom Bullock said everything with eggs had been taken off the cafe’s menu.

“We’ve replaced whole eggs with egg powder in our baking. Things like eclairs have to be made with whole eggs. A Kiwi classic is a ham and egg sandwich - that’s been mostly unavailable this year,” Bullock said.

Sun Hoon Kim’s Auckland bakery Daldang specialises in macarons which rely on about 1000 eggs a week to keep up with demand.

“No suppliers have eggs,” Kim said. “We have to go to the supermarket up to three times a week.”

Kim said paying retail prices has squeezed the business on top of minimum wage hikes and a slowdown in business stemming from the cost of living crisis.

“We can’t make less product because we have to keep the quantity up to sell. We just work harder to not have to raise our prices,” he said.

Bakehouse on Bond owner Tom Bullock says the egg shortage has led to items being cut from their menu.

Restaurant Association chief executive Marisa Bidois said the rising cost of eggs was impacting the price of some menu items.

“For some businesses, for example, cafes where eggs are a fundamental part of their offering, providing substitutes is more challenging. The rising cost of accessing this product is having an impact on menu pricing.”

“Hospitality business owners are adept at adapting their menu to respond to fluctuations in ingredient supply and cost so diners should look out for creative alternatives to eggs where supply is impacted,” Bidois said.

Poultry Industry Association director Michael Brooks said the shortage is a result of a number of factors, particularly the decision by Foodstuffs and Countdown to stop buying colony eggs from suppliers in 2018.

“That threw projections of what people were going to do into real disarray because if you’re going into free range, you have to buy new farmland - it’s a new system,” Brooks said.

He said during the pandemic, government regulations stopped cafes from selling eggs, which “had a big impact on farms who don’t supply supermarkets”.

“That’s led to a loss of about 25 small free-range farms because they just couldn’t stay in business,” Brooks said.

“Big supermarket chains want a guarantee of supply, so suppliers will go to the big players. A lot of small, particularly free-range [farms], sell to a big player who has a contract with supermarkets. But if you don’t have that, you can’t sell in supermarkets.”

He said about 55 per cent of eggs in New Zealand are set aside for supermarket contracts leaving the rest for smaller suppliers.

“In New Zealand now, we have the colony cage system, barn, and free range. We have about 33 per cent in colony, about 35 per cent in free range and the rest is moved into barn [farms],” Brooks said.

Michael Brooks, executive director of the Poultry Industry Association. Photo / Paul Estcourt

Kim said, “Every supplier has prices going up - not just for eggs but all our main ingredients: almond powder, sugar, butter.”

With wholesale prices for eggs at around 50c per egg, he said retail charges are at over $1 per item meaning Kim has had to stop production of certain products.

“We are concerned. Our focus now is on macarons. These days, the market is very bad so our profit is dropping as well,” Kim said.

“We can’t keep putting our prices up. Restaurant prices can go up but our products are quite different,” he said.

A Countdown spokeswoman said it had been working closely with farmers to improve egg supply.

“We have seen supply steadily improve in the last couple of months.

“We expect it to get even better in the coming months.”

“In our business, the supply challenges we’ve experienced have been reflective of a very disrupted couple of years for our farmers with Covid-19 causing significant peaks and troughs in demand, the war in Ukraine resulting in feed prices spiking, and inflationary pressures affecting packaging and labour costs.”

Brooks said growing supply doesn’t mean prices will drop but will stop further price hikes.

“It’s going to get better over the next few months, but it’s still tough.”

Brooks said, “The price of eggs has gone up but there’s been so many extra costs that have come onto the farmers over which they have no control.”

He said that while the hospitality industry can expect prices to drop by early next year, prices will not be as low as caged eggs.

“The cheaper option for caged eggs is not on the table anymore. You’ll never get eggs as cheap as they were under that system,” he said.

Marisa Bidois, CEO of the Restaurant Association.

Capital Eggs general manager Janet Love said supply to the company has been tight since last November.

The Wellington-based company supplies eggs to restaurants and cafes around the North Island as well as Foodstuffs North Island.

“Supply has been pretty tight and we’re still struggling to get enough to supply our hospitality businesses and supermarkets,” Love said.

She said making sure supermarkets and smaller retailers have enough product is “a massive juggling act”.

“If we don’t have eggs then we don’t have a business,” Love said.

“Ideally we try to give everybody their full order. We’re having to ration eggs out to make sure everyone has enough.”

Love said the company has had to raise prices three times this year alone.

“They just can’t supply enough. They’ve got huge demand coming in and they’re just not able to meet that demand,” Love said.

Brooks said, “From 4.2 million layer hens at the end of last year until about April of this year, we were down to about 3.4 million hens,” Brooks said.

He said however that number is slowly tracking upwards with current laying hen numbers at about 3.6m.

“We think that by October, [supply] will get back and will ensure a more stable supply. It’s not a lot, but it ensures there’s enough eggs there,” Brooks said.

He said that while the industry supported the shift to more ethical farming, factors like rising grain prices and a short timeline for the farming transition has squeezed supply across the industry.

MPI acting national manager of animal welfare and NAIT compliance Brendon Mikkelsen said, “The use of conventional cages in Aotearoa New Zealand has been phasing out for 10 years.”

“The final transition date was 1 January 2023, after which no egg production facility can use conventional cages, also known as battery cages,” Mikkelsen said.

Mikkelsen told the Herald the independent National Animal Welfare Advisory Committee (Nawac) considered housing systems for hens and the welfare impacts in 2012.

“When developing the 2012 code of welfare for layer hens, Nawac concluded that conventional cages do not provide adequate welfare for layer hens. A 10-year transition period away from conventional cages was introduced to allow egg producers time to shift farming practices,” he said.

Alka Prasad is an Auckland-based business reporter covering small business and retail.