Structure and dynamics of australia's commercial poultry and ratite industries

Chapter 1: The Chicken Meat Sector

1.1 Introduction

Consumption of chicken meat in Australia during 2006-07 is estimated to be around 811 591 tonnes which is equivalent to around 454 million birds. This is equivalent to approximately 37.4 kilogram consumption per capita or the processing of around 8.73 million broiler chickens per week. This is an increase in consumption from 2004-5, when approximately 687 960 tonnes, equivalent to around 430 million birds, were consumed. (32.7 kilograms per capita consumption or the processing of around 8.3 million broiler chickens per week).

The Australian Bureau of Agricultural and Resource Economics (ABARE) figures for chicken meat are based on the formula that chicken meat consumption is 94.9% of all poultry meat consumption.

Consumption was predicted to increase around 0.2 kilogram per year.

Obtaining planning approvals for new broiler farms continues to be one of the major difficulties for the chicken meat industry. This is particularly so for Victoria, NSW and Queensland. The high cost of shedding, the difficulties, delays and costs in getting permits and some limitations in getting finance all coupled with lower returns for growers is resulting in declining quality broiler shed numbers. Production localities principally remain unaltered to those described in 2005 and are shown in Figures 1.1 and 1.2. There is, however, a trend for the general loss of farms in peri-urban areas such as the Mornington peninsular in Melbourne and loss of broiler farm contracts in the Mangrove Mountain area in NSW. Because of the issues of rural residential living new broiler farms and complexes as has been discussed above and being built on larger land holdings and more distant to the processing plants

1.2 Background

Before the 1990s, chicken meat strains were all of Australians origin and the Australian chicken meat lines (broilers) were variable in both performance and carcass quality. Liveability in growing stock was generally acceptable where operators maintained their breeding stock free of disease agents such as Mycoplasma gallisepticum. Fertile egg production and day old production was generally poor by international standards.

New genetic material in the form of hatching eggs imported through Torrens Island quarantine station in South Australia gave the industry an opportunity to upgrade the genetics of the Australian broiler bird.

Two key factors prompted the importation of international strains of meat chickens. One was the increasing commercial pressure on the smaller less vertically integrated companies for the supply of breeder birds, fertile eggs and day old chickens. The other was the recognition that the small Australian gene pool was limiting the rate of genetic improvement. The initial outcomes of these importations were varied. While advantages were seen in egg production, hatchability and better growth rate, the carcass conformation (particularly fat content) was not viewed favourably by some processors and customers.

There was also need for improvement in both husbandry and housing if the level of performance of these new strains was to approach their genetic potential. Two major disease episodes also dramatically affected certainty about whether new breeding stock should be imported into Australia. These were Marek’s Disease (MDV) which seriously affected both imported strains and saw batch mortalities exceeding 50%, and J-Leucosis which predominantly affected the Ross strain. During these times there was a move back to the utilisation of the only indigenous broiler breeder strain left, the Bartter bird.

Productivity losses were high which necessitated a total review of husbandry practices as well as the importation and registration of the type 1 Rispens Marek’s vaccine. J-Leucosis was only resolved after further importation of J-Leucosis free stock. While J-Leucosis testing is not mandatory, most importing companies now test their stock for J-Leucosis.

1.3 Genetic Breeding Stock

Importation through the Torrens Island post-arrival quarantine (PAQ) facility created problems due to limited positions available to competing importers. The government-owned Torrens PAQ facility is operated under government supervision by a consortium of Australian poultry companies. Other poultry species including commercial layers, ducks and turkeys were also using Torrens Island. The large gap of up to five years between importations meant that there was limited ability to take advantage of the continued genetic improvements of the meat chickens seen overseas. Also, when problems occurred such as J-Leucosis, the time taken to correct this stock deficiency was prolonged. Two of the major chicken meat integrators decided to construct their own private importation facilities in line with government regulations. This allowed the more economical importation of larger numbers of great grand parent birds (GGPs) as frequently as every six months. This has enabled Australian producers to maintain their chicken meat genetic gain at a level comparable with that of other international companies to Australia.

Despite the construction of two privately owned PAQ importation facilities, and the recent reduction of the quarantine period from 12 weeks to 9 weeks for chickens and turkeys, there are limited positions in the Torrens Island quarantine station available to competing importers, with requirements allocated out until 2015. This means that the opportunities for the importation of new lines of birds, particularly those competing with existing available genetic stock are limited without the development of existing or other PAQ importation facilities.

Today there are no longer any indigenous broiler strains used by the major meat chicken producers. There are, however, remnants of these strains within alternate system producers. Invariably, either through take-overs or direct purchases of parent breeder stock, most integrators have a number of strains within their operation.

The smaller operators see the option of running several parent strains as an advantage to establish business relationships with the breeder suppliers, to offset concerns about negative changes in the performance of particular strains and finally as a buffer against limited access to certain breeder stock. Limited access has occurred during previous episodes of emergency diseases such as Newcastle Disease (ND) and Avian Influenza (AI).

Imported stock is brought in as GGPs usually every six to twelve months in privately owned facilities and every two or more years through Torrens Island PAQ facility. GGP and Grand parent (GP) facilities are usually located in the same region as designated hatcheries. Day old parent breeders (PBs) are then distributed by road transport and occasionally by air transport to parent facilities located in Victoria, NSW, South Australia, Queensland and WA. There are no parent breeders in the Northern Territory and ACT. Parent broiler facilities for each integrator generally supply fertile hatching eggs to state based hatcheries from which day old chicks (DOC’s) are delivered to regional broiler (grow out) farms. Historically, processing plants and grow outs were centred around and relatively close (in distance terms) to the major metropolitan cities, with outlying farms no further than 50 kilometres away. However, rural residential living and community concerns about poultry sheds have necessitated changes to the traditional location of parent breeder farms and broiler farms.

Australia is viewed favourably by the international poultry genetic companies as a location for genetic stock for the following reasons. Australia is considered politically stable, has well structured and implemented animal health programs including quarantine and biosecurity, and is considered at a lower risk of terrorism activities (physical or biological) which can immediately close borders and restrict all movements. With this favourable consideration of Australia, one large international breeder of poultry (including broilers, layers and turkeys) has formed a company to supply domestic and international markets. This company oversees the PAQ and breeding facilities for broiler breeders in Australia and New Zealand (NZ).