Drought to force up price of eggs

EXPECT to pay up to 50c more per dozen for eggs, as drought-stricken farms in the United States force up the price of grain worldwide.

The fall in supply from the US has sent grain prices up by about 30% - or $100 a tonne - a massive increase in cost for those rearing chickens.

As it drags on - and there may be no relief until May 2013 - the price of 12 eggs would likely rise from $3.20 to about $3.70, or about 8c per egg.

Australian grain prices go up in line with the international rate, set from Chicago, but producers also import soybean meal direct from the US.

The higher prices do mean good news for Australian grain growers who have struggled to break even in the past three years.

Hit by flooding and droughts, the Australian industry may now increase imports.

Sunny Queen managing director John O'Hara said farmers became concerned with grain prices about two weeks ago.

"From then until now, the price on the grain futures set in Chicago has gone up by $100 per tonne and that's expected to continue," he said. "To give the consumer a fair idea, we don't expect the current position to abate until May next year when the next US crop comes in."

If Australia's agricultural regions were struck by disastrous weather between now and then, those price rises could last even longer.

Despite the price of eggs going up more than 10%, Mr O'Hara was upbeat about buyers still giving eggs a crack.

"It's still a cheap form of protein, two eggs for breakfast - it's still a good value source of protein."

The price of chicken may also increase.

Australian Chicken Meat Federation deputy director Dr Vivien Kite said producers may need to pass on a 5% increase in costs

"Feed costs make up between 65% and 70% the cost of producing a live chicken," Dr Kite said.

Even if that cost was passed on Dr Kite said the price of chicken had not gone up in three years.

It is unclear which will increase in price first, the chicken or the egg.

Topics:  eggs

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