A R16bn staple industry: prices reset higher after the 2023 avian-influenza shock and remain firm in 2026

~27m

98.5%

+29.6%

R45.62

Hens in the national laying flock before the 2023 outbreak (SAPA)

Of SA eggs produced in cage systems in 2022 (SAPA)

Rise in the producer price in 2023 as HPAI cut supply (SAPA)

Average retail price per dozen large eggs in 2024 (Stats SA)

Average producer price, all eggs (R per dozen)

Supply shocks set the cycle. Avian influenza removed a large share of layers in 2023; prices stayed high while flocks were rebuilt.

Feed drives cost. Maize and soya are roughly two-thirds of an efficient producer’s cost, so margins follow the grain cycle.

Retail takes a large slice. The estimated retail mark-up over producer price was 61.6% in 2024, which rewards producers who sell closer to the consumer.

Housing is still cage-based. Welfare-driven change is slow in SA, but new houses should be convertible to enriched or barn systems.

Regulation is light but real: statutory SAPA levy, DALRRD grading and labelling rules, and state-vet disease controls.

Sources: SAPA Egg Industry Statistics 2022; SAPA Industry Profile 2023; SAPA Egg Organisation Report 2024; DALRRD Egg Value Chain Profile 2023. *Indicative farm-gate price, Selina Wamucii, September 2026. Industry value is a planning estimate.

Industry structure rewards efficient, well-located producers; buyer power and feed suppliers cap margins

Rivalry

Commodity product, a few national integrators plus many independents; price follows supply cycles.

So what for NWES

High

Avoid dependence on any single retailer: cap the largest customer at 15% of volume.

Sell 45% of eggs to informal and farm-gate buyers, where service earns a premium and payment is cash.

Lock feed on rolling contracts and hold 14 days of stock in silos.

Invest in biosecurity as the true barrier to entry and to survival.

Value chain position: NWES buys pullets and feed, and owns production, grading and delivery, the stages where freshness is won.

Buyer power

Large retailers dictate terms; informal buyers are fragmented and value service over price.

High

Supplier power

Feed, pullets and genetics come from concentrated suppliers; contracts and bulk buying help.

Medium–High

Threat of entry

About R740 of capital per hen place and disease risk deter casual entry at commercial scale.

Medium

Substitutes

No cheaper complete protein; chicken and polony compete for the same rand.

Low

Industry lifecycle: mature, cyclical, consolidating at the top and fragmented at the base.