Graphic video showing day-old male chicks being shredded in Melbourne egg hatcheries has renewed animal rights activists' calls for an end to the legal practice.

But breeders and scientists say they are already working on ways to identify the sex of chicks before they hatch.

Animal Liberation and Aussie Farms released footage on Tuesday showing male chicks being pushed through a maceration machine at one of the country's biggest chick suppliers.

Male chickens cannot produce eggs, and many chicks are destroyed when they are born.

"We've known about this process for a long time, but it's been very highly guarded by the industry; nobody's been able to capture it here in Australia until now," Aussie Farms director Chris Felforce said.

"I think most people would be absolutely horrified to learn that this is what they're paying for when they buy eggs, even those with ostensibly higher-welfare labels like 'free range'."

Specialised Breeders Australia said the video appeared to be shot in their company's hatchery operations.

As the largest supplier of day-old chicks to the Australian layer industry, the company said it was keen to adopt new chick gender detection technology when it becomes available, to avoid killing newborn chicks.

"Specialised Breeders Australia acknowledges this is an issue and is looking forward to adopting new technology as soon as it becomes commercially available where male embryos can be identified during incubation," the company told AAP on Tuesday.

"This will eliminate the current practice."

CSIRO researcher Tim Doran is currently working on such a method.

"As soon as the hen lays an egg, what our technology does is we can screen the egg with essentially a laser light that detects the male," he told AAP.

"And then you can remove them before incubation so only female chicks go through and hatch."

He expects the research to be completed in the next two years.

Similar technology is being implemented in Germany and in the US.

The model code for domestic poultry says surplus animals must be disposed of humanely.

"They must be destroyed humanely by a recommended method such as carbon dioxide gassing or quick maceration and thoroughly inspected to ensure that all are dead," it says.