NEW ZEALAND’S largest wholesaler, Gilmours, has warned that an egg shortage in the country caused by a transition from conventional cages to colony systems could last until next year.

The company said in a letter to customers that new legislation, which came into force in 2012, required egg farmers to move from conventional cages to new systems over a 10-year period.

“A huge investment is now required by the industry to meet this new code which, in turn, is driving price increases from egg farms.”

The transition is staggered, with 40% of cage eggs required to switch by the end of last year, and the remainder by the end of 2020 (or 2022 in the case of newer systems).

The letter adds that there is uncertainty as farms struggle to gain consent for new production, while other suppliers exit the retail sector or egg farming altogether.

“This is resulting in a shortage of eggs which is expected to continue over the short- to medium-term.”

Those who are converting have culled birds in order to install new colony systems.

New Zealand egg prices are relatively high, with a conventional caged egg costing about NZ$0.25 (13p). Free-range eggs are more than double that.

An Egg Producers Federation analysis suggested the cost of converting would range from NZ$660,000 for a small farm to $8.5m for larger operations.

The laying hen population is currently 3.5 million birds, against a human population of 4.7 million.

Markets are generally balanced when bird numbers are around 4.1 million, egg farmer Nick Bennick said.

Gilmours added it would be introducing eggs from colony-kept hens, but at a price premium because of the higher cost of production.