The Poultry Meat Farming industry was marred by industry consolidation, which led to contractions in employee numbers and wages
Melbourne, Australia (PRWEB) September 04, 2012
The Poultry Meat Farming industry in Australia has lost its footing in the five years through 2012-13. Although a largely vertically integrated industry, with ownership and supply contracts between poultry farmers and poultry processors, the industry was marred by industry consolidation over the period that led to contractions in employee numbers and wages. According to IBISWorld industry analyst, Kiera Outlaw, “the majority of participants in the industry are individual poultry farmers that produce chickens under contract for major processors”. However, as major processing companies increased their acquisition activity, smaller processing companies that were not acquired were forced to either expand or exit the industry, taking their contracts with them. This resulted in a decline in independent poultry farmers as well.
However, continued growth in chicken consumption underpinned the industry, offsetting significant revenue contraction. Poultry Meat Farming industry revenue contracted just 0.2% over 2012-13. Although chicken is in high demand, the contraction was likely due to costs outpacing fee growth, with many smaller poultry farmers recording small and declining profit. Outlaw adds, “over the five years through 2012-13, industry revenue has contracted at an annualised 1.4% to reach $923.5 million”. The industry is expected to return to growth as costs moderate relative to fees. Moreover, demand for the industry's main product, chicken, is expected to grow over the next five years, although growth is expected to moderate. Over the five years through 2017-18, industry revenue is expected to grow. Although grower fees will increase only marginally, continuing consolidation will provide cost savings for larger industry players.
Market share concentration in the Poultry Meat Farming industry is low, and major players include Inghams Enterprises Pty Limited, Proten Limited and Baiada Poultry Limited. The largest operators in the industry are vertically integrated poultry growers and processors. Of the three major players, only Proten Limited is strictly engaged in poultry meat farming. While industry concentration is considered low, the actual dominance of major players within the industry is considerably high. As well as growing their own chickens, industry operators also contract out poultry growing operations to farmers within the industry.
For more information, visit IBISWorld’s Poultry Meat Farming report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry is made up of companies that hatch and raise poultry for meat production. Poultry includes chickens, turkeys, ducks, geese and other game birds. This industry begins with the fertilisation of meat-breed eggs, includes the hatching and raising of poultry for meat production, and ends with the supply of live birds ready for slaughter (usually aged between five and eight weeks) to poultry processors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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