As you may be aware from recent news reports, roughly 1.8 million hens out of Australia's 21 million commercial layers have been culled due to three strains of high pathogenic avian influenza (HPAI) in Victoria, NSW and the ACT. For more information about HPAI and the severe consequences it has for bird health please visit www.dpi.nsw.gov.au and clock on one of the Avian Influenza banner.
Given that almost 10% of the laying hens in Australia have already either been culled or quarantined awaiting culling and we cannot be confident that futher farms will not be affected by HPAI, we are writing to advise you of the following things.
1. We are taking every biosecurity step we can afford to implement because HPAI is not something we can insure against. There is some compentsation for the costs of removing the birds and cleaning an affected farm but the money is recouped via a levy on all chicks we buy for the next several years so even if we avoid infection we will paying for this for years to come.
2. We know that we are likely to disappoint everyone over the coming weeks and months. We are sorry but we simply cannot fill the hole that has been created throughout the supply chain. We will continue our standard flock rotation to maintain optimal flock ages so we humbly request your understanding of the significant pressure that is on us from all sides.
3. If you order we do not have enough of, we divide the stocks we have between those who have ordered them. Our total orders are approximately double our available stock now but the shortage is particulary acute in some of our most numerous products.
4. We are not accepting any new customers at this time depsite numerous calls from desperate people but undoubtedly many of the wholesalers that we supply are being hit with queries and we are seeing increased requestes for eggs compared to, for example, the far lower demand in January and February only 4-5 months ago. For the most part we have been trying to allocated people their average order.
5. We will be closely monitoring our debtors and preferential treatment will be given to customers who stay within our agreed payment terms. Most of you have nothing to worry about!!
6. Since at least October last year we have been struggling to keep up with demand for all the largest size eggs, particularly 800g Jumbo across all systems. This is unrelated to the HPAI outbreak but is a factor in our new pricing.
7. We are requesting your support for a very substantial price increase of roughly $1 per dozen initally and possibly more if further outbreaks occur. This is around 10c per egg but it will neable us to increase our biosecurity measures and begin to prepare for the phasing out of cages which is set to take place in just 8-11 years without any government assistance.
We are in entirely uncharted waters. The disease threat to our buisness is real and ther is virtually nothing we can do to prevent wild birds coming into contact with our free range hens. The industry has been warning the government (and others who have been trying to force a transition towards free rnage eggs) that these kinds of outbreaks would inevitably occur and add greatly to the volatility of egg prices.
We are hoping and praying for the best and have extended our sympathies to those we know in the industry who have been affected so far. It is a terribly emotional time for those who have lost not only their hens but their livelihoods and life savings.
We will of course review this pricing position if there are further serious limitations on supply. We recognise that farmers are rolling out price increases at difference rates and some are moving in multiple stages. For some context, we were sent photos from the Sydney Markets this past weekend showing prices for our eggs and others between $16 per 30 cage eggs and $23 per 20 free range eggs. This equates to a range between $96 and $207 per standard box. We are choosing a more moderate and cautious approach until we see the full effects of this shortage in both the retail and wholesale markets.
If you have any questions, please contact me on 0447 669 234 or rob@canobolaseggs.com.au
Regards
Rob Peffer
Canobolas Eggs