South Korea bird flu crisis creates huge demand for eggs

AUSTRALIAN egg farmers are preparing to help fill a 180 million egg shortfall in the Korean market.

Egg shortage: South Korean health officials wear protective suits collecting chickens that have died of bird flu from a chicken farm at Umsung, South Korea. Picture: AP

AUSTRALIAN egg farmers are preparing to help fill a 180 million egg shortfall in the Korean market.

Following a particularly bad case of bird flu, South Korean producers have been forced to cull 30 million hens, leaving the country short of about 15 million dozen eggs a week.

The Federal Government last week finalised a new export agreement with South Korea, allowing Australian eggs to be sold in that country.

“The department worked hard to secure the market access when this significant opportunity for Australian egg farmers arose,” a Department of Agriculture and Water Resources spokesman said.

“This has paved the way for ongoing export opportunities for the Australian egg industry.”

The South Korean Government has also announced it will remove import tariffs on eggs until at least June 30.

Select Equities institutional research adviser Mark Topy said it was expected Australia’s top three egg producers — Sunny Queen Farms, Pace Farms and ASX-listed Farm Pride — would fill the majority of the shortfall, worth $20 million.

Mr Topy said Farm Pride’s share price had gone up more than 5 per cent since the deal was announced last week.

“There have been reports that egg prices have already spiked 25 per cent in South Korea, and there are shortages in supermarkets,” Mr Topy said.

“Domestically, we’re coming off the back of a recent shortage due to uncertainty around free range definitions, and this may cause another shortage here, bringing prices back up.

“It will take at least six months for South Korea to build its flocks of birds back up to the levels they need.”

Australian Egg Corporation Limited managing director Rowan McMonnies said the Korean egg shortage presented a huge opportunity for Australian egg farmers.

“Australian farmers work hard to ensure our hens, eggs and farming practices are among the best and safest in the world and this is reflected by the fact that South Korea has opened its doors to us in its time of need,” Mr McMonnies said.

Mr McMonnies said AECL was not aware of any supply squeeze having arisen at this stage.

“It is early days and it will depend upon how impressed the South Korean’s are as to whether Australian egg farmers need to expand capacity to meet domestic supply commitments,” he said.

Mr McMonnies said Australian egg farmers were ideally positioned due to South Korea’s growing preference for brown eggs, as opposed to white eggs which have been sent by US exporters.

Eggs are an important part of the South Korean diet, consuming slightly more eggs per capita than Australians at 250 eggs per person in 2014 compared to Australia’s 227.