PoultryWorld: Farm report: Desperate times call for desperate measures

Egg producers in New Zealand have been hit hard since the Covid-19 pandemic entered the country closing the food service sector, leading to a slump in demand for their produce. Wairarapa egg farm shares their experience of coping with a national egg oversupply.

 

 

The way New Zealand handled the Covid crisis is probably one of the best in the world. That said, strict lockdowns and border closures did have a ripple effect through the economy, unearthing and amplifying an already existing issue: an oversupply of eggs. Some panic buying at the start of the country’s first lockdown eased the pressure on the oversupply of eggs but it was not long before the market was totally saturated as the hospitality industry shut down. One of those egg producers who quickly had to find alternative outlets for his eggs is free-range producer Chris Martin who owns Wairarapa Eggs, based at Carterton in the North Island.

Chris explained his situation: “The main challenge at the moment is the trying market conditions. We are encountering competitors that we have never seen in our area. Basically the national flock is too large. Without tourism and the cruise ships the food service sector has been particularly severely affected.” He continued: “New Zealand responded hard and early to tackle the virus and the initial lockdown created a lot of panic buying which did soak up a bit of that early egg surplus. But adding to the challenge is that we are currently moving through a legislative process of phasing out conventional ­cages. With the 2 major FMCG companies announcing that they want to be cage free by 2025, this has meant that there has been a shake up of the industry with people transitioning out of cages into cage-free options, or into colony.”

Oversupply explained

“Up until late 2019 cage prices were very high which I think meant that some of the larger farms were running the new cage-free operations alongside their old cage ones. Since the money was so good they hung on to the cages, as they did not need to transition yet. I reckon this has added to the oversupply. If the national flock dropped by 15% we would be OK, I think. Given the nature of the industry where it is farm against farm in the marketplace, a drop in bird numbers probably won’t happen as we all don’t want to be the one caught short.”

Chris had high hopes at the beginning of the Covid crisis: “At the beginning when Covid-19 hit, we initially thought we would come out unscathed. But with the government’s prolonged restrictions on cafes, bakeries and restaurants, the industry supply to food service venues has been hard hit and forced a lot of eggs into the supermarkets.”

“We have had to drop prices and promote eggs a lot more aggressively than we had initiually thought just to shift stock via online sales. It took quite some time before the situation came back anywhere close to normal,” he added.

Early adopter of free range

Chris bought his farm 8 years ago from his in-laws when he was 25. At that stage it included a 15,000 bird barn and a free-range farm that was a converted cage facility. “Over the last 4 years, we have shut that farm down and built a new 24,000 bird free-range farm in Carterton. My in-laws had bought the original farm when they emigrated here from Holland 36 years ago from another Dutch guy who had started the farm 20 years before that.” He now has 24,000 birds on 13 hectares and has split the birds into 6 flocks housed in 3 large poultry sheds. “We did not build the conventional bricks and mortar shed as the rest of the industry tend to do, but instead built open air canvas tunnel houses. My goal was to build a free-range farm for the least amount of money I could,” he said.

Chris normally has 20,000 birds actively laying at any one time with 4,000 birds either phasing in or out. The farm has an average laying rate of 84%. “All the houses are connected by conveyor belts to the main grading shed where we hand pack them using a 10,000 eggs per hour grader,” Chris said. “We do not wash all the eggs, only the soiled ones that a quick buff does not clean. Any cracked eggs with the membrane still intact go on for further processing to form a whole egg pulp that normally gets sold to larger bakeries. While leaking or severely soiled eggs go on for animal feed.”

Heavy investments in technology

Free-range poultry farms in New Zealand are generally quite small and old, therefore the level of investment in technology among farmers is quite low. “On our farm we have invested heavily in technology that monitors feed usage,” said Chris. “It is not as flash or as sophisticated as that found on some of the caged hen farms but we do not have to worry about environment monitoring and fans, as we are naturally vented. We use predominately Hyline Brown birds as they are more suited to our ‘out of the box’ type sheds. There are also some Shaver Brown birds but they seem to need some fine tuning. We always have issues with them as they just can’t manage our more environmental conditions,” he said.

Egg price is always such a sensitive topic around here, but on average farmers receive between US$ 3.50 and US$ 4.50 per dozen taking in all the tray or box size variants

Managing oversupply

Birds are normally culled at Wairarapa Eggs at around 80 weeks old. However, due to the current national egg oversupply the national flock size has been deemed too big, forcing Chris to cull 2.5 months early. Desperate measures in desperate times. The feed costs for an island nation are always going to be higher than for other parts of the world and New Zealand is no exception. “Our feed prices are around US$ 710 per tonne and we source form a local feed mill just around the corner. Egg price is always such a sensitive topic around here, but on average farmers receive between US$ 3.50 and US$ 4.50 per dozen taking in all the tray or box size variants.” Looking ahead the main challenge for Chris is the market uncertainty. Even though New Zealand seemed to get Covid-19 under control at an early stage, the food service sector is still to some extent suffering.

 

Chris McCullough

Freelance multi-media journalist