Industry firms scramble to recover from higher operating costs
Melbourne, Australia (PRWEB) May 01, 2013
The Egg Farming industry in Australia has benefited from an improved public perception of eggs over the past five years after a long-term decline in egg consumption per capita. For this reason the demand for eggs has increased over the five years through 2012-13, as new research suggests eggs are healthier than previously believed. Moreover, the renewed popularity of cooking shows in Australia has encouraged people to cook with eggs and egg products. According to IBISWorld industry analyst Andy Brennan, “demand for free-range eggs in particular has boomed, as consumers take into consideration animal welfare issues when purchasing food items”. Despite this, industry revenue is forecast to decrease 1.9% in 2012-13 to reach $445.2 million, due to structural changes in the way eggs have been produced.
Some cracks have appeared in the industry over the past five years. These have included large cost increases due to significant rises in feed prices. “The industry has also faced a jump in expenses with an increase in the legal limit for cage sizes, which was implemented 1 January 2008,” says Brennan. “This has required a large capital investment by egg farmers and forced a large number of smaller cage egg producers out of the industry.” This resulted in a fall in overall production and an egg shortage over 2008-09 and 2009-10, as the industry scrambled to consolidate and improve production levels. For these reasons, industry volatility has been particularly high over the five years through 2012-13. Large declines in revenue in 2008-09 and 2009-10 due to changes in production methods caused revenue to contract at an annualised rate of 4.3% over the five years through 2012-13.
The outlook for the industry appears bright. Consolidation of players to improve productivity levels is anticipated as larger players take advantage of economies of scale and boost profit levels. In addition, growth will be supported by increased demand for value-added egg products and a further small rise in per capita consumption. Farmgate prices will benefit from the growing share of higher value free-range eggs demanded by consumers at the expense of cage eggs.
Market share concentration in the Egg Farming industry is medium. The three largest companies are Alimfresh Pty Ltd, Sunny Queen Pty Limited and Farm Pride Foods Limited.
For more information, visit IBISWorld’s Egg Farming report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry farm poultry for production of eggs and hatch egg breed chicks.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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