Consumers are “trading down” from animal proteins like beef to poultry and eggs because of food inflation, which has led to a strengthening demand for eggs according to new research.
But egg prices have also become increasingly volatile and reached “record-high levels” in some countries, according to Rabobank.
Its latest research suggests this has had an impact across the egg supply chain – from breeders and producers to customers in retail, foodservice, and food processing.
Rabobank said that it expects egg prices to “stay relatively high throughout 2023” but also warned that supply is dropping in many countries.
Earlier this year the Irish Farmers’ Association warned that the price of eggs on Irish supermarket shelves had “gone up substantially in all retailers yet the portion received by farmers is abysmal”.
According to Rabobank’s latest egg industry research while food prices have started to drop in some countries, egg prices have kept rising.
It also highlighted that feed costs typically represent 60-70% of an egg producer’s costs.
“Any change, upward price movements and especially any uncertainty about feed costs significantly impacts egg prices.
“Feed prices are expected to stay elevated this year. Rabobank’s feed price outlook indicates a small decline of 10% from the peaks of 2022 but ongoing high price levels. This will keep production costs relative highly,” researchers stated.
Rabobank also examined other key factors which it had identified as driving egg price volatility including avian influenza outbreaks (bird flu).
It warned that the pressure of bird flu has been very high and ongoing outbreaks in Europe have had an impact on egg supply and also on industry profitability.
According to the latest research the impact of Covid-19 on egg buying patterns also continues to be a notable trend.
Rabobank said government restrictions on people’s movements during the pandemic resulted in a significant decline in the out-of-home consumption of eggs, particularly breakfast sales, but consumers then shifted their behaviour to eat breakfast at home – with eggs a central item.
“This change in consumer behaviour still supports strong demand for egg products for the at-home market,” the bank stated.
Rabobank also noted that new regulations have been introduced in some European countries which have affected the egg sector. It said the most relevant of these was the introduction of a ban on male-chick culling at the hatchery level in Germany last year.
“This regulatory change has impacted the European market, as Germany is the number one import market, representing 45% of EU egg imports,” the bank stated.