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Egg standard – cost statement

16 June 2011

There have been recent media reports about the cost of implementing a new egg standard, in particular a requirement to stamp individual eggs.

A comprehensive cost benefit analysis was prepared for the proposed standard. The regulatory impact statement (RIS) for eggs was created by FSANZ after fully considering all submissions made by stakeholders on earlier drafts of the report.

The RIS was then peer reviewed and endorsed by the Centre for International Economics. For small farms, initial costs are estimated to be $550 to comply with all elements of the standard, with $100 of this for manual stamping equipment. Ongoing costs are estimated at approximately $1500 per annum.

In Queensland, where egg stamping is already required, the cost for small egg farmers to stamp eggs was estimated to be 0.083 cents per egg. While it can be difficult to estimate implementation and ongoing costs, Queensland was able to provide a range of cost estimates based on their industry’s actual experience in implementing a stamping system. To increase the robustness of the analysis higher cost estimates provided by stakeholders were often used to ensure a clear net benefit was likely to be achieved.

The current inability to identify eggs once they are removed from packaging has made investigating egg-related illness more difficult because the business producing the eggs can’t always be identified. While it is correct that consumers and food businesses will have discarded contaminated eggs they have used, other stamped eggs are likely to still be in the pack, which will assist in tracing the source of an outbreak.

During an outbreak, the identifier will enable government investigators to more easily trace the source of the contaminated eggs and prevent further release of contaminated eggs into the food supply.

Traceability makes possible the targeted recall of suspect eggs, as opposed to an industry-wide recall, thereby reducing the financial loss to the egg industry that an outbreak of illness causes. In a recent outbreak of egg- related illness in Queensland, the existing egg stamping system in place enabled the source of the contamination to be traced very quickly, stopping the further release of contaminated eggs and greatly reducing the cost to the egg producer by restricting the egg recall to specific dates.

The egg standard was gazetted on May 26 and formally comes into effect in November 2012.

You can find out more about the egg standard here.

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