An egg processing system, comprising: a frame; a controller configured to receive a classification signal indicative of an egg classification status for each of a plurality of eggs carried by an egg flat; a transfer head assembly coupled to the frame and in communication with the controller and configured to remove a plurality of eggs from the egg flat, the eggs being grouped into at least a first and second subset based on the egg classification status, the controller being configured to direct the transfer head assembly to selectively release the first and second subsets separately based on the respective egg classification status of the eggs, wherein the transfer head assembly comprises a plurality of lifting devices configured to individually and selectively release a respective egg held thereby; a conveyor assembly configured to move the eggs to a transfer position beneath the transfer head assembly for removal of eggs from the egg flat; and being characterized by: an egg discard receptacle operably engaged with the frame, the egg discard receptacle being configured to translate laterally beneath the transfer head assembly along a rail assembly to receive eggs of one of the first and second subset selectively released thereby, and a hatching basket which is loaded onto a basket rail assembly disposed below the rail assembly on the frame, but elevated above the flat transfer position, such that the hatching basket is loaded below the egg discard receptacle for advancement to a position beneath the transfer head assembly and above the flat, to receive eggs of the other one of the first and second subsets selectively released from the transfer head assembly. a frame; a controller configured to receive a classification signal indicative of an egg classification status for each of a plurality of eggs carried by an egg flat; a transfer head assembly coupled to the frame and in communication with the controller and configured to remove a plurality of eggs from the egg flat, the eggs being grouped into at least a first and second subset based on the egg classification status, the controller being configured to direct the transfer head assembly to selectively release the first and second subsets separately based on the respective egg classification status of the eggs, wherein the transfer head assembly comprises a plurality of lifting devices configured to individually and selectively release a respective egg held thereby; a conveyor assembly configured to move the eggs to a transfer position beneath the transfer head assembly for removal of eggs from the egg flat; and being characterized by: an egg discard receptacle operably engaged with the frame, the egg discard receptacle being configured to translate laterally beneath the transfer head assembly along a rail assembly to receive eggs of one of the first and second subset selectively released thereby, and a hatching basket which is loaded onto a basket rail assembly disposed below the rail assembly on the frame, but elevated above the flat transfer position, such that the hatching basket is loaded below the egg discard receptacle for advancement to a position beneath the transfer head assembly and above the flat, to receive eggs of the other one of the first and second subsets selectively released from the transfer head assembly. an egg discard receptacle operably engaged with the frame, the egg discard receptacle being configured to translate laterally beneath the transfer head assembly along a rail assembly to receive eggs of one of the first and second subset selectively released thereby, and a hatching basket which is loaded onto a basket rail assembly disposed below the rail assembly on the frame, but elevated above the flat transfer position, such that the hatching basket is loaded below the egg discard receptacle for advancement to a position beneath the transfer head assembly and above the flat, to receive eggs of the other one of the first and second subsets selectively released from the transfer head assembly.