ABOVE: A modern broiler farm.
Australia’s meat chicken (or broiler) sector has a relatively brief history when compared with other major Australian livestock industries.
In this two part series, we look at that history, with additional insights into our meat chicken industry.
There are currently more than 800 commercial meat chicken growers in Australia.
Most grow chickens under contract to meat- processing companies and are known as ‘contract chicken growers’.
These producers grow 80 percent of Australia’s meat chickens.
There were no official government records until the mid-1960s, so the exact time of when intensive poultry production began is not known.
However, industry sources estimate that three million meat chickens were produced in 1951.
Most commercial meat chicken farms are intensive highly mechanised operations that occupy a relatively small area compared with other forms of farming.
Commercial broilers are raised on litter floors – for example, rice hulls or wood shavings – in large poultry sheds.
Australian broilers are not kept in cages, regardless of the production system used.
The main production systems are generally referred to as conventional, free range and organic.
History of the meat chicken industry
The rapid expansion of the poultry industry took place in response to demand during the 1950s.
Most production during this time was in the hands of ‘backyard’ producers and larger family operations.
The larger operations were often involved in the production of chickens as an offshoot of their egg-producing activities, as well as being producers and/or distributors of other livestock.
The birthplace of the commercial industry was the outer Sydney metropolitan area, though other centres of commercial production quickly appeared near other major population centres.
In the decade 1950-51 to 1960-61, the size of the industry increased almost sevenfold.
In the early 1950s, the first real efforts were made to develop an Australian meat chicken breed, resulting in the release of Australia’s first scientifically bred meat chicken strain in 1959.
With the introduction of continuous-chain processing systems, the processing of chickens became faster and more efficient and the resultant economies saw a rapid fall in the price of chicken to the consumer.
As a result of these developments and the rise of the ‘integrator’ in the industry, further expansion of the commercial industry occurred during the 1960s.
These vertically integrated companies – fashioned on the highly successful US meat-chicken company model – owned chicken breeding and hatching operations, feed mills and chicken processing plants and contracted out the growing of chickens from day-old to slaughter weight to ‘contract growers’.
The establishment of Kentucky Fried Chicken in Australia, with its first store opening in 1968, had a major impact on the consumption of chicken.
In the 12 months from 1970-71, a total of 75 stores were opened and, during the same period, total Australian production increased by 38 percent.
Coupled with further improvements in the genetic material available, refinement of the nutrition and husbandry of broiler chickens, improvements in processing technologies and further growth in demand, the industry’s output increased more than fivefold in the 1960s and more than doubled again in the 1970s.
It has continued to grow steadily though less spectacularly over the past 30 years.
Before 1960, the traditional roast chook eaten on special occasions was either a spent layer (broiler) or a male from a layer strain that was reared to about 12-14 weeks of age specially for meat production.
These male birds were cross-bred layer strain birds, resulting from mating White Leghorn cockerels with Australorp hens.
These are usually described in the industry as WL x AL, with the breed name of the cockerel being placed first and that of the hen last.
About 50-60 percent of the improvement in meat chicken growth rates since the start of intensive poultry farming is due to improved breeds.
Structure and ownership of the meat chicken industry
The meat chicken industry now operates largely through vertical integration, with company ownership of breeding farms, multiplication farms, hatcheries, feed mills, some broiler growing farms and processing plants.
Three large integrated companies supply about 80 percent of broiler chickens marketed in Australia.
The biggest of these three companies is Inghams Group Limited, followed by Bartter Enterprises and Baiada.
All three of these companies are privately owned and each have farming and processing operations in at least three states.
The balance of output is shared among seven medium-sized companies – each supplying between 1-3 percent of the market nationally – and a myriad of smaller processors.
Processing companies generally contract out the growing of their broiler chickens to contract chicken growers.
These growers own the farm and provide the management, shedding, equipment, labour, bedding and other inputs for the rearing of the chickens.
The processing company provides, and at all times owns, the chickens and provides the feed, medication and technical advice.
Contract growers are paid a growing fee, which currently varies from 59-73 cents per bird.
The terms and conditions of the grower contracts, as well as the growing fees, are established by state government constituted committees in some states, or by negotiation between growers or groups of growers (under authorisation by the Australian Competition and Consumer Commission) and companies in other states.
The payment generally includes a performance-based component.
Approximately 800 growers produce about 80 percent of Australia’s meat chickens under contract to processing companies.
The majority of meat chickens are produced on large company farms or on farms owned and managed by ‘intermediary’ companies that own a number of farms – each managed by a farm manager – and that enter into contracts with the processing companies to grow out chickens on a larger scale.
The three major poultry producing companies also have their own breeding farms, supplemented by some contract operators, and supply eggs to their company’s hatchery.
These companies also have their own feed mills in at least some of the areas in which they operate and own laboratories to test samples for common poultry pathogens and other bacteria.
Several companies have their own research farms.
A number of the medium-sized companies also possess their own parent breeding farms and, in some cases, hatcheries.
Each of the larger companies operating in the industry also has a product research and development facility.
Chicken is marketed throughout Australia by the large and medium-sized integrated companies under various brand names through numerous outlets.
Brands range from nationally recognised names to state recognised names and house brands.
Numerous smaller processors also market chicken either under their own particular brand or, in some cases, without any brand identification other than their name and address on the original packaging.
A completely vertically integrated company would operate:
- Feed mill – producing feed for breeders and meat chickens
- Breeding farms – producing fertile eggs
- Hatchery – producing day-old chicks
- Growing farms – producing the end product, chicken meat
- Processing plant – to process and market chicken meat
- Veterinary services
- Transport.
In next month’s issue, part two will give an overview of chicken meat production.