Over the past seven years, chicken has overtaken beef, veal, lamb and pork as the most popular choice of meat for Australians.
The chicken meat industry has grown by 4 percent annually over the past decade and now accounts for 25 percent of the meat produced in Australia. As the country's most consumed meat, forecasts for chicken production are strong and, according to the Australian Bureau of Agricultural and Resource Economics and Science (ABARES), this share is expected to grow to 28 percent by 2018-19. Per capita consumption is also expected to continue upwards over the period, rising from 45.2 kg to 47.7 kg.
Among factors behind this growing popularity is that retail prices are competitive compared with other meats, with chicken meat being almost half the price of lamb in 2012-13 and remaining the most economical choice for consumers.
Consumer preference changing
Consumer demand for whole fresh chicken is strong in Australia, with a move away from frozen chicken. According to Dr. Andreas Dubs, executive director of Australian Chicken Meat Federation, demand is increasing for chicken pieces and, more recently, further processed "ready-to-heat-and-eat" products, both fresh and frozen.
As in many other markets, Australian consumers are voicing increasing concerns about poultry welfare. Attention may have been focused on the layer industry and stocking densities, but free-range broiler production now accounts for 15 percent of the industry's output.
Free range is grown under a single standard, Free Range Egg and Poultry Australia (FREPA). Well over 100 chicken meat farms are accredited by FREPA, but as of January 2011, only four egg farms had been accredited.
Demand for free range has resulted in a rapid rise in the use of the Royal Society for the Prevention of Cruelty to Animals' (RSPCA) approved farming practices, notably for barn-raised chickens. However, with the two main supermarket chains now stipulating that all barn-raised chicken meat must be sourced from accredited farms by the end of 2014, this is set to grow further.
Organically produced chicken accounts for less than 0.5 percent of the total market.
The industry has a relatively small direct customer base, with 40 percent of raw chicken meat sold through supermarkets. Wholesalers buy 19 percent, and the food services industry, specialty poultry retailers, pet food manufacturers and butchers purchase the remaining 39 percent.
Exports and imports
Australia now exports 5 percent of its poultry products, mainly the cheaper cuts and offal as there is little demand for these products from the home market.
From 2004 to 2009-10, around 4 percent of chicken meat production was exported, with South Africa accounting for 33 percent of exports, Hong Kong 21 percent, the Philippines 18 percent, Papua New Guinea 6 percent and Vietnam 5 percent. In 2014-15 exports are predicted to rise to 6 percent from 34,000 tons to 36,000 tons, and to 45,000 tons by 2018-19.
Australia is, to all intents and purposes, self-sufficient in poultry meat.
The only poultry meats that can be imported to Australia are retorted products. A strict import protocol is maintained, with treatment required based on the presence of certain diseases.
Who's who?
Of the country's seven largest processors, Baiada and Inghams share 70 percent of the market. The five medium-sized processors -- Turi Foods, Hazeldene, Red Lea, Cordina and Golden Cockerel -- make up most of the remaining share with smaller operations Mt. Barker in Western Australia, Tasmania's Nichol's and Queensland's Inglewood, the largest organic producer and processor.
Until last year, more than 95 percent of Australia's chicken meat was produced by these seven still family-owned and operated processing companies, but in mid-2013, Inghams was sold by Bob Ingham to private equity firm, TPG.
High cost base
Despite this long period of growth and a bright outlook, not everything has been easy for the Australian poultry industry.
Substantial increases in grain prices have had a major effect on production. The industry has also had to come to terms with significantly higher energy costs, both of which have put pressure on margins, particularly as retail prices have barely kept up with the consumer price index. Additionally, there has also been the problem of avian influenza.
Avian influenza
Australia has clear biosecurity guidelines to protect against avian influenza.
These were developed more than a decade ago for broiler farms and are part of the National Farm Biosecurity Manual for Poultry. Additionally, new food safety standards for poultry meat, which have been implemented over the past three years, stipulate that processors are only to process poultry grown under conditions that comply with these biosecurity standards.
However, in 2013, two layer farms in New South Wales were hit by avian influenza. The infection is not believed to be the result of a quarantine failure, but rather a breach of biosecurity at farm level.
The initial outbreak is thought to have come from the local wild bird population and affected free range farms before spreading to caged production. After three months, the farms were given the all clear, but the impact of the outbreak was far reaching, affecting exports and biosecurity.
Despite the country's exports being small, they are still an important and complementary market, and the disruption has had a significant impact on the country's producers. According to Dubs, traditional markets, such as South Africa and Hong Kong were closed and the uncertainty made it difficult for exporters to plan ahead. The outbreaks also affected the export of feathers and, importantly, interrupted the export of day-old chicks.
Chicken will remain Australia's most popular meat in the medium term. The outlook up until 2019 is healthy as both production and consumption are forecast to rise, and retail prices to remain below those of other meats. Despite the ongoing pressures from high feed costs and disease, according to Dubs, per capita chicken meat consumption will easily exceed total red meat per capita consumption before 2020.
