Bakeries start to crack under pressure as egg shortage causes prices to rise

By Maja Burry RNZ

Commercial bakers are feeling the heat as a nationwide egg shortage drives up wholesale prices for the key ingredient.

A ban on battery caged hens has left some supermarket shelves empty and prompted cartons to be rationed. The Egg Producers Federation has said more than 75 percent of chicken farmers have had to change their farming methods or their career because of the ban.

Wellington-based Nada Bakery manager Michael Gray said eggs were a commodity product and the shortage had exacerbated already high prices.

"We've already seen eggs increase significantly over this year - we had an increase in August of about 27 percent, we had another increase of about 13 percent I think at the end of November, and we're already seeing another increase due to the shortage."

Dunedin-based company Cowells has been making and supplying supermarkets with pavlovas for decades.

Owner Matthew Heaton said without egg whites, there was no way of making a classic pavlova, so the rising cost of the ingredient was a concern.

"There's only so much you can absorb before you have to pass it on [to the customer] ... if you keep putting the price up, all of a sudden demand can drop down. So you [have] got to be reasonable and [charge] what you can charge, but you've also got to go to make a dollar at the end of the day."

Heaton said he wanted to support New Zealand chicken farmers and source eggs locally, but if the situation worsened, he might have to explore importing egg whites from overseas.

"If things change too much, we might have to look at different options."

Baking New Zealand president Bernie Sugrue said the egg shortage hit at a bad time, with price hikes elsewhere already putting margins under strain.

Sugrue said the cost of butter had doubled in the last 12 months, and at his Timaru-based bakery, they had stopped making biscuits as they were no longer economical.

"The biggest issue that the craft bakers have is a rise in all ingredients. It's not just one specific ingredient ... flour has skyrocketed, butter, sugar, we've got eggs … then of course, if we wanted to distribute that ... the freight is very expensive now."

Surgrue said despite the challenges, bakers who made good business choices would continue to be successful.

"Bakers have to really work smarter, not harder, and really realise what is the best margin product that we're making and concentrate on that, and you know, ditch the ones that there's really not a lot of margin in."