September 18, 2003
2003 Outlook For Australian Poultry and Products
Australian poultry production is forecast to continue growing from record levels of 2003/04. Production, however, has been constrained by reduced feed grain supplies and record high feed grain prices resulting from one of the worst droughts in a century. Exports amounted to only 3 percent of total production in 2002/03, making poultry a relatively unique industry within Australia's largely export orientated agricultural sector. Australian quarantine regulations prohibit the importation of fresh chicken meat.
SITUATION AND OUTLOOK
Australian poultry production is forecast to continue growing from record levels achieved in 2003/04, albeit at an incremental rate. Strong domestic demand for poultry meat combined with higher retail prices for alternative meats provided incentives to poultry producers to increase production. Production, however, has been constrained by reduced feed grain supplies and record high feed grain prices brought on by one of the worst droughts in a century.
Total poultry meat production for 2003/04 is forecast at a record 766 thousand metric tons (TMT). Post has revised total poultry production for 2002/03 upwards to 752 TMT, sharply higher than the 704 TMT produced in 2001/02. While the growth in broiler production slowed in the last quarter of 2002/03, a liquidation of layer hens due to high feed grain prices and reduced industry profitability contributed to the upturn in total poultry production. Tight regional egg supplies and sharply higher egg prices are evidence of the liquidation of laying stock.
According to historical records of the Australian Bureau of Agriculture and Resource Economics (ABARE), poultry production has increased incrementally every year since 1993 when annual production was only 482 TMT. ABARE's longer-term projections have production increasing incrementally every year reaching 877 TMT in 2007/08.
Total poultry meat exports are forecast at 24 TMT in 2003/04 (July-June). This is up slightly on the 23 TMT for 2002/03 and 21 TMT for 2001/02. Exports amounted to only three percent of total production in 2002/03 making poultry a relatively unique industry within Australia's largely export orientated agricultural sector.
South Africa remained Australia's largest export destination in calendar year 2002, taking 40 percent of all shipments. Hong Kong is another significant market, accounting for 20 percent of exports, followed by China and Sri Lanka, with six and five percent, respectively. Export markets appear to be growing slowly year-over-year from 2000-2002.
Australian quarantine regulations prohibit the importation of fresh chicken meat, primarily given concerns about infectious bursal disease (IBD). Importation of cooked chicken meat is permitted under very strict conditions. Imports are virtually zero.
Australia has been working on an Import Risk Analysis (IRA) for uncooked chicken meat since 1997. Most recently, Biosecurity Australia released an IRA Draft Methods Paper on uncooked poultry meat on January 6, 2003. The Paper was circulated to stakeholders to provide information on the proposed approach to be taken on the IRA. The IRA Panel is still working on the draft IRA Report, which will contain risk assessments for each disease agent identified in a previously released Technical Issues Paper and propose risk management, where required. The United States, Thailand and the European Union would be among the potential suppliers of fresh poultry to Australia.
Per capita poultry meat consumption has been the success story of Australian livestock industries. ABARE puts total poultry meat consumption at 36.5 kilograms per person for 2002/03, up from 26.5 kg in 1993/94. ABARE projects per capita consumption rising fairly steadily to 40 kg per person by 2007/08.
Statistics on broiler production are currently unavailable for Australia. Post estimates that broiler meat production accounts for about 89 percent of total poultry meat production. A conversion factor of 0.89 is applied to total poultry meat figures to derive broiler production. Layer hens, ducks, drakes, turkeys and pheasants provide the balance of poultry meat production in Australia.
ABARE estimates retail poultry meat price at A$3.80 per kg in 2002/03, down slightly from A$3.84 per kg in 2001/02. ABARE's longer-term projections have poultry meat prices rising to A$3.88 in 2003/04, before gradually falling to A$3.58 per kg in 2007/08. An expected return to more normal feed grain pricing is expected to allow for the declining longer term pricing.