The price of eggs has suddenly shot up all around the world. So what’s going on in New Zealand? By Andrea Graves.

Egg-pocalypse hit my local New World on Christmas Eve. By 8.30am, shoppers were in a flap because eggs had sold out. A national shortage had been predicted for months and came to fruition just when we wanted to whip them into meringue, then top them with berries.

There were simply not enough hens laying eggs to meet demand – about 400,000 too few. And the situation is not expected to improve until later this year, when egg farmers’ current chicks become old enough to start laying.

There are several reasons for this deficit, but a key one is the end of battery cages. Since their demise was announced in 2012, to be phased in over 10 years, the proportion of eggs coming from caged hens has shrunk dramatically. Most hens in the country’s 126 laying-hen farms are now housed in large sheds. Hens confined to these sheds lay what are known as barn eggs, while hens with daytime access to the outdoors are known as free range. Barn hens are uncaged, have litter on the floor, and can be stocked at seven birds per square metre. Free-range birds can be stocked at nine birds per sqm, and can go outside during the day.

Although battery cages became illegal on January 1, another type of cage exists. Shoppers may not know their eggs come from caged creatures, because their eggs are not labelled as such. They are “colony” eggs, according to the cartons.

There’s no perfect egg-farming system, as each has pros and cons. But the controversial landscape of animal-welfare considerations, along with world events such as war and a pandemic, has whipped up a flurry of changes in the egg business that’s ruffled the feathers of farmers, retailers, shoppers and the hens themselves.

A third of New Zealand’s eggs are laid by hens in colony cages. These cages provide for some basic behavioural needs that battery cages did not: a curtained-off nesting area, perches, and a knobbled plastic pad as a scratching area (most of the floor is wire mesh so droppings can be removed).

Battery cages often housed four to six birds, each with less space than an A4 sheet of paper. A colony cage is much larger and contains about 60 hens. Although each hen has a space allowance only 20 per cent bigger than an A4 sheet, more space is freed up when they huddle together.

Colony cages were recommended by the independent advisers to the Minister of Agriculture, the National Animal Welfare Advisory Committee (Nawac), when the code of welfare for layer hens was last reviewed in 2012. Planning for another review is due to begin this year. It requires the committee to assess farming practices and the relevant science, and to recommend animal welfare code rules to the minister. The minister gets the final say after public consultation and discussion with industry groups.

Colony cages are now the cheapest way to provide eggs. Any decision to change systems will impose extra costs on farmers and, therefore, shoppers. So, how do scientists determine what is acceptable animal welfare?

See how they lay

The life of a laying hen is short and tightly controlled from egg to slaughterhouse.

The two commercial breeds of laying hens in New Zealand look like classic brown-­feathered hens. Although they are the same species as white-feathered meat chickens, they have a lighter build and grow far more slowly. About 7.5 million of their eggs a year are hatched in incubators at three large hatcheries. Male chicks can be picked out by their different feather colouring, and they are macerated or gassed with carbon dioxide at one day old because they can’t lay eggs. The beak tips of female chicks are removed with an infrared beam in order to minimise the harm their pecking can cause each other. They are shipped in crates to rearing facilities, where they live until they reach egg-laying age, usually in the same system in which they will spend the rest of their lives.

Their feed is a mixture of grains, plant protein such as soy, vegetable oil, vitamins, minerals and certain amino acids. They instinctively go to perches to sleep when it gets dark and lay an egg almost every morning, producing more than 300 in their first year. Barn and free-range birds live in flocks numbered in the tens of thousands, but are sometimes separated into smaller groups of thousands to minimise how many can cluster together.

During their laying life, about 3 per cent of caged birds die, along with 5-6 per cent in free-range systems if there is no disease outbreak, says vet Neil Christensen.

When their first laying cycle ends, at about 85 weeks of age, their best laying days are over. The sheds are “depopulated”, which means staff members catch all the birds and put them in crates to be trucked to a slaughterhouse. It’s also permissible to kill them on site by dislocating their necks or gassing them with carbon dioxide – or, more humanely but expensively, a mixture of gases. At the slaughterhouse, they are shackled upside down by their feet, have their heads dipped in an electrified stunning bath so they become unconscious, and their throats are cut. They often become pet food or stew-type human food, or they’re composted.

After the shed is depopulated, it’s cleaned and a new batch of young layers enters.

Last year, animal welfare inspectors visited 18 layer facilities, according to the Ministry for Primary Industries (MPI). Farmers were advised in advance of 11 of the visits, which were proactive inspections relating to the colony-cage transition. The others were unannounced and instigated by welfare complaints MPI received from the public.

Chicken welfare

It was once thought that as long as animals continued producing eggs, milk or meat, their welfare was fine. But no longer. “A chicken can lay eggs and still be suffering,” says Nikki Kells, a senior lecturer at Massey University’s Animal Welfare Science and Bioethics Centre. Animal welfare includes the animal’s mental state, she explains. “All vertebrate animals are sentient and their experiences matter to them.”

Much of the evidence Nawac used to approve colony cages came from experiments that measured how much chickens want a resource. Hens’ need for a secluded nest was established by requiring them to squeeze through small gaps or push against weights to get to one. Hens avoid small gaps, but they squeeze through increasingly small ones to reach a hidden spot as their laying urge grows stronger. They’ll push as much weight to get there when they need to lay as to reach food when they’re hungry. They’ll also “work” in this way to get to loose litter on the floor instead of wire mesh. Chickens spend much of the day searching through stuff on the ground if it’s available, regardless of how well fed they are. Perches, too, are in strong demand. But it’s hard to get them to “work” for extra space, although they choose it if given the option.

These results are evidence of what is considered to be chickens’ behavioural needs. “Not providing for needs is likely to cause distress and frustration,” says Kells. However, the Animal Welfare Act, which the codes of welfare sit under, expects more than just meeting proven “needs”. It states that animals must have the “opportunity to express normal patterns of behaviour”.

Kells says colony cages are an incremental improvement on battery cages. “It’s better than nothing, but it clearly still isn’t meeting all of the animals’ behavioural needs.” The SPCA’s view is similar, according to its scientific officer, Marie McAninch. Among its concerns is the inadequacy of one nesting area for 60 birds who all want to lay within two or three hours. “Usually, the recommendation is one nest box for four to five hens,” she says. She believes the scratch pad, which measures about 30 square centimetres, is a poor substitute for the ground. “There is no material for dust bathing.”

A single shed of colony cages can hold up to 40,000 birds. McAninch has been inside one of these sheds and describes the sight as “quite arresting – the sheer number of animals you can fit into these systems. It makes you wonder how you can check all these birds. And what about emergency events like flooding?”

On Waitangi Day this year, fire in two sheds killed about 50,000 barn hens north of Hamilton. It was the third mass death of chickens due to fire since 2018 (the other two were on meat chicken farms). Sheds must meet building standards to mitigate fire risk, but sprinklers are not required.

But non-cage systems also have downsides, according to the report by Nawac that accompanied the 2012 review. Accumulated faeces can cause dust problems and ammonia gas, and hens are more prone to plucking and injuring each other with their beaks. They also tend to pile together and smother those at the bottom.

Free-range hens experience the highest rates of disease and mortality, followed by barn hens. When it comes to caged hens, “very little goes wrong with them”, says specialist poultry vet Dr Neil Christensen. He says that if there were only caged birds, and that includes colony cages, there would be little for him to do in the egg industry.

Cages exclude most infectious disease agents, he says, by separating the birds from their faeces, and from wild birds and unclean water. He credits the hardiness of modern laying hens to the disease-free status and sophisticated breeding of their grandparents. “Without the disease eradication efforts of the breeding companies over the past 60 years, supplemented by modern vaccines, we wouldn’t be able to farm layer hens intensively in colony cages, and much less so in the large free-range flocks needed to meet consumer demand,” he says.

Christensen says free-range hens need more medicines, including for worm control, and more vaccinations. “Free-range birds can be as healthy as those in colony cages, but you have to work at it. It’s doable, but it’s not the paradise people paint it to be. We’ve had to relearn how to manage old-fashioned diseases common up to the 1960s, and some new ones, in modern free-range operations.”

Bird flu outbreak

That said, all chickens in New Zealand have a comparatively low disease risk.

There are currently no free-range chickens in the United Kingdom, for example, because of an outbreak of bird flu being spread by wild birds. In the United States, the worst outbreak of bird flu on record is threatening to stretch to a second year, with more than 40 million chickens culled so far. Shortages have seen egg prices soar.

But Kells emphasises that while physical health affects animals’ mental experiences, it is not the only influence. Barn and free-range systems address hens’ key behavioural needs by allowing them to perch (often at different heights), nest without undue competition, dust bathe, roam and forage. This is particularly true in free-range systems. They also have space to stretch tall and flap their wings, and to move away from aggressive birds.

Her view was last month echoed by the European Food Safety Authority’s Panel on Animal Health and Welfare. In a report requested by the European Commission, it states there is a “severe limitation in opportunities to forage and explore” in cages, which has a “relevant negative impact on the birds’ welfare because it results in negative … states such as distress, boredom and frustration”.

Many European countries currently allow colony cages, but the report recommends that all laying birds be housed in non-cage systems with elevated platforms and dry, friable litter. Its advice is likely to support a legislative proposal by the commission that’s expected later this year.

Are the hens truly happier?

Instances of caged eggs being sold as free range, along with rumours that free-range birds don’t go outside, means that some shoppers may be wary of being duped into paying extra for eggs that don’t come from happier hens.

In 2017, a Newsroom investigation revealed that Palace Poultry sold eggs to Countdown from its own free-range operation, but also from a wholesaler. All were labelled as free range, but the wholesaler’s eggs were from caged hens. The wholesaler claimed Palace Poultry knew the eggs were from caged birds; Palace Poultry claimed it believed they were free-range. The Serious Fraud Office investigated and determined that “the high evidential standard for laying criminal charges had not been met”.

Two Commerce Commission investigations into separate incidents did lead to convictions. In 2014, a Northland egg producer pleaded guilty to intentionally labelling caged eggs as free range, and another egg producer did the same for offences committed in 2016. Both men received sentences of home detention.

Michael Brooks, speaking as chief executive of the Egg Producers Federation, says it supported the legal action. It developed an audit system to track bird and egg numbers from each farming system, which is administered by the Ministry for Primary Industries, and introduced voluntary egg stamping linked to a website called Trace My Egg.

“Since both these steps occurred, there have been no cases of current cage or colony-cage eggs sold as free range, and I have heard of no rumours that it is occurring. And you can be sure if it was, I would hear rumours,” said Brooks.

As for whether free-range hens go outside, vet Neil Christensen says buyers can be confident they do. He collects indoor faecal samples from free-range birds to check for worm eggs, and “there’s generally quite a lot of grass in there”.

Cheap cheap

Gareth van der Heyden is chief executive of Better Eggs, a major producer of every category of eggs. He doesn’t back away from the fact that about a quarter of his eggs are from colony cages, because he knows price matters greatly for some people. “We grew up on a dairy farm in the 80s and times were tough for Mum and Dad. I remember when we kids were allowed half an egg each at breakfast.”

Despite this, van der Heyden was glad to see the end of battery cages and says Better Eggs plans to completely phase out colony cages. But he also notes that farmers still need to make a profit. He says, per bird, it costs about twice as much to set up a barn operation compared with colony cages, and it’s triple the cost for a free-range facility.

The SPCA’s McAninch argues that higher prices are worth it. “Higher-welfare eggs can be more expensive, but there are other costs beyond what we see at the checkout – ultimately the hens are paying the price for cheap colony-cage eggs.” She believes everyone who chooses to eat eggs should buy them from the highest welfare system they can afford, and points out that there are simple and healthy ways to get protein from plants as well.

Michael Brooks, executive director of the Poultry Industry Association of New Zealand, says many farmers chose to leave the industry when battery cages were effectively banned. Many who moved to colony cages spent at least $1 million each, and those who went on to barn or free-range systems had to get resource consents and buy land.

“To go free range, it goes to millions if you’re buying new land,” he says, noting that as a result, many small-scale farmers have been taken over by big companies. There was no government assistance for the transition. Brooks says the egg industry is supportive of the colony-cage system, and most farmers do not have the financial resources to change again.

A farmer’s biggest running cost is feed, says Brooks, and grain prices in particular have soared as a result of the Ukraine war and inflation. That expense, along with new cages and sheds, followed the massive hit of Covid-19. A plunge in demand for eggs resulted in oversupply and lower prices. “So, farmers weren’t going to keep pumping out birds. They perhaps overcompensated,” he says, explaining the egg shortage.

Catching up will take time because farmers order their chicks from hatcheries about six months in advance, and hens don’t lay eggs until they’re about 18 weeks old. It’s forbidden for biosecurity reasons to import extra eggs, although dried powdered egg can be imported.

Supermarket showdown

Another cause of the egg shortage, says Brooks, was action by supermarkets. In 2017, when farmers with the oldest battery cages had already upgraded as part of the staged transition, Countdown announced it would no longer sell colony eggs by the mid-2020s. Foodstuffs then pledged to do the same, but not until 2027, “to enable producers to realise their investment [in colony cages] and be able to reinvest in alternative farming infrastructure”.

Both chains cited consumer sentiment as the reason for the ban, and Countdown says it has seen a 93 per cent increase in customer demand for cage-free eggs since 2016. But Brooks doubts the reasoning. “I question that in certain socioeconomic groups. If it’s truly consumer choice, allow consumers to choose. Nawac decided colony cages meet welfare standards – it’s not for the supermarkets to decide.”

He says nearly half of supermarket sales were battery or colony-cage eggs last year, and suspects the decision was made to stop animal activists protesting.

Supermarkets sell more than half of the country’s eggs, and their move meant even more farmers left the industry, says Brooks. Other big players with cage-free commitments include McDonald’s, Burger King, Denny’s, Starbucks, Nestlé, major hotel chains, leading food service groups and service stations. Some, like supermarkets, limit their ban to eggs with a shell, and others include liquid egg and egg as an ingredient.

Van der Heyden supports the supermarkets’ decision and says it’s consistent with overseas trends. “We are working with our customers to ensure their cage-free commitments are met,” he says.

Forest run

Better Eggs plans to lift its egg production by 20 per cent this year and is exploring a new category: forest-range eggs. Its forest-range farm near Tokoroa ups the ante on the free-range model, with large sheds each housing 20,000 hens among native and exotic trees. Deciduous trees have been planted for their leaf litter and the sunlight they let through in winter. “Chickens are descended from junglefowl, so we are taking them back to their natural environment,” says van der Heyden.

The day I visit, thousands of the ex-­junglefowl are outside making the most of the varied terrain, scratching at the soil underneath and between trees, scaling small hills and rock-hopping. Despite the well-established ancestry of chickens, van der Heyden believes this is the world’s only egg farm running birds in a forest environment at scale.

Better Eggs has trademarked the term “forest range” and is progressing towards standards consistent with those required under SPCA certification. That’s an audited accreditation that requires overhead shelter and shade outside on free-range farms, plus other obligations that exceed the code of welfare’s minimum standards. Forest-range eggs are currently the same price as free range, but the sunk cost is huge: the purchase of 140ha of land and construction of eight sheds costing more than $120 per bird.

So, in the future, are we looking at half an egg each? Van der Heyden is not sure. “I took my kids to McDonald’s the other day and it was $3.80 for a hash brown. A free-range egg costs 70-90 cents and is full of goodness. So eggs are still relatively cheap.”

• Andrea Graves is a journalist and the author of What Your Chickens Want You to Know: Backyard chicken-keeping in Aotearoa. She has a PhD in animal welfare science.