January 17, 2005

 

 

Australian Report Puts Country's Poultry In Positive Light

 

An Australian report has forecast that poultry processing revenue in the country will increase from an estimated $3462.6 million in 2003-04 to $3987.9 million in 2008-09. This represents positive growth at an average real rate of 2.9% per annum.

 

Over the forecast period, IBISWorld estimates that real prices will increase, and production volumes will grow, but at a slower rate than the past five years.

 

Fluctuations in the price of poultry, prices of other meats such as beef, lamb and fish, and consumption patterns in relation to consumer attitudes and awareness of the nutritional value of poultry, are likely to affect the industry.

 

Production of poultry meat is forecast to increase steadily during the next five years. ABARE (March 2004) forecasts that production will increase from 726 kt in 2002-03 to around 824.1 kt in 2008-09; representing average annualised growth of approximately 2.1% per year. This is considerably slower than in the previous five years.

 

Production will aim to meet demand, and slower growth in population and per capita consumption will slow demand growth.

 

Consumption per capita is estimated to increase by an average of 1.2% per annum to reach 37.7 kg in 2008-09.

 

Over the next five years, poultry prices (per unit of meat produced) are forecast to increase slightly in real terms, due primarily to a continued shift to higher value added products with higher margins.

 

The benefits of technological improvements and higher productivity will continue to be passed through to consumers, restraining prices. However, the pass through of these gains will be partly in response to competition from beef.

 

In recent years, there has been a significant change in the product mix of the poultry industry, and this is likely to be the basis for future growth and improved profitability.

 

Firms in the industry will continue to introduce products with a higher value added component.

 

More processed poultry will be boned and there will be further development of products such as croquettes, gourmet prepared meals, specialist convenience meals, and so on.

 

Cost savings could be achieved in future by reducing payments to growers, reducing water usage through better effluent treatment, and by obtaining labour productivity gains (e.g. more or better use of machines and labour scheduling).

 

Opportunities exist for further automation and improved efficiency in processing. This may involve automatic weighing, grading, cutting and packing systems.

 

Some key issues affecting growth are as follows:

• deregulation of grower fees for chicken growing and the lifting of quarantine restrictions on some imported products
   
• increased pressure from compliance issues
   
• planning restrictions i.e. processing plant developments
   
• as the global poultry market expands, differences in labour and freight costs, and tariffs may alter the competitive advantages of traditional poultry exporters
   
• difficulty finding reasonably sized land allotments in close proximity to existing infrastructure
   
• improving feed supply