Egg farmers on both sides of the production fence say major supermarkets will not have enough stock to fulfil their pledge to phase out cage eggs.
Coles no longer sells cage eggs under its private label brand and Woolworths has committed to phasing out cage eggs by 2018. Aldi recently announced that it will phase out cage eggs in its stores by 2025.
But producers say supermarkets will never meet their customers demand if they rely solely on free range eggs.
Industry researcher IBISWorld says the major supermarkets are responding to changing spending habits and an increasing push from customers to source ethically produced livestock products.
In its report, Egg Farming in Australia, IBISWorld senior industry analyst Brooke Tonkin says rising concerns among consumers about the treatment of animals in food production has contributed to rapidly rising production of free range eggs.
"This has led to a marked decline in the proportion of egg production made up by cage eggs, with cage egg farmers switching to free-range or barn-laid egg production to ensure that they can continue selling to major supermarkets," Ms Tonkin said.
NSW Farmers egg committee chairman Bede Burke says cage production is more reliable than free range, and major supermarkets would never stop buying from 60 per cent of the industry which had absolute reliability of production, guarantee in food safety and lowest cost.
"The irony of supermarkets is they want to put $1-a-litre milk on the supermarket shelves, but they don't want to put out $3-a-dozen eggs, they want to put out $5.50-a-dozen eggs," Mr Davis said.
He said cage egg producers had replaced their cage infrastructure between 2000 and 2010, and the investment would take 10 to 15 years to depreciate before it was renewed or replaced.
He said cage egg consumption last year grew 3.5 per cent, year-on-year.
"My prediction is, as we move forward with free range systems, and more limited access to control problems we are having, there will be a renewed desire to keep birds indoors, and put birds back on wire again."
Free range farmer Amanda Mutton, of Long Paddock eggs Bungendore, says supermarkets will continue relying on cage producers well into the future.
"We can't deliver another egg. Every free range farm sells everything. We will never do without the cage eggs. There is room for everyone," Ms Mutton says.
"This is their [caged farmers] livelihood too. I have been to every industry conference and they are as passionate about their eggs as we are," Ms Mutton says. "They have spent millions, they look after their chooks properly, they feed them everything they need, they have everything down to a tee."
IBISWorld says the egg farming industry is forecast to generate revenue of $759.6 million in 2015-16.
