Page 12 - National Poultry Newspaper

An adaptable and nimble industry popular with investors
THROUGHOUT the by grower agreements, industry has ensured it re- operational component to change and future devel- and more efficient trans- speed fans, energy effi-
past 10 years, the poultry industry has been chang- ing – occasionally at a rapid pace and almost always for the better.
housed production sys- tems and integrity pro- grams that make the fun- damentals of poultry asset investment so attractive.
mains relevant and attrac- tive to investors.
others.
These investors have
opment that many urban fringe poultry properties provide.
fer of the asset from one party to another.
cient heaters, solar power generation plants and multiple sources of se- cure water commonplace in new farm builds and renovations.
Despite these changes, the sector is at the top of the shopping list for both large and small agribusi- ness investors.
Though the answer is varied, there are some clear trends.
Within the generally adopted financial model that is the background to investor, valuer and fi- nancier decision making, the cost ratio remains the most sensitive driver of enterprise profitability.
Poultry assets will un- doubtably continue as an attractive investment sec- tor into the future.
It’s not only the finan- cial returns and positive consumer preferences but the risk controls provided
The adaptability of the
Recently, large invest- ments in the poultry in- dustry have been made by passive investors wanting to own the assets and gain exposure but leave the
Aside from the financial return, which is relatively strong in comparison to other agribusiness assets, investors are attracted to poultry assets given the scale or quantum of in- vestment, opportunities to expand and favourable depreciation allowances for new builds and rede- velopments.
Within this asset class increased scrutiny is be- ing placed on pre-pur- chase due diligence, with the modern investor well- schooled on factors such as processor counterparty, location and farm setup, which can impact the long-term returns on in- vestment.
To this end, the industry is rising to the challenge with measures such as concrete floors, variable
The strong performance of the industry throughout the most recent pandemic- affected period has fur- ther emphasised the re- silience of the sector and its financial returns for investors.
While consumer percep- tion of farming systems was the key challenge of the 1990s, today ef- ficiency and cost control in an era of increasing energy costs are principal concerns.
What are the modern poultry assets investors looking for?
favoured the opportunity to allocate the capital at either end of the poultry production chain in facili- ties such as breeder farms, hatcheries, feed mills and processing plants, which are all assets major indus- try participants have been willing to take off their balance sheet and operate as a long-term tenant.
Active investors have been prominent in broiler and egg farms where their desire to invest and man- age assets in return for a higher return has been met at a range of scales.
To investors and financi- ers alike, cost control has become a primary consid- eration of due diligence.
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In many cases investors of these assets are also attracted to the long-term prospects for land use,
As well as the asset, these investors are under- taking increased levels of due diligence on farm management teams, in the acknowledgement that a well-run farm with dedi- cated and processional staff makes for an easier
Gen Z not ready to eat lab-grown meat
of gender and national scenario may develop in identity. relation to food, particu-
NEW research by the University of Sydney and Curtin University has found that, despite having a great concern for the environment and animal welfare, Genera- tion Z is not ready to eat lab-grown meat.
ready to accept cultured meat – defined in the sur- vey as a lab-grown meat alternative produced by in-vitro cell cultures of animal cells, instead of from slaughtered animals.
re pur- reputation as a supplier suing broader adoption of
As a cohort of 5 mil- lion people born between 1995-2015 encompassing 20 percent of the Austral- ian population — they’re consumers to be reckoned with.
• 17 percent of respond- ents rejected all alterna- tives, including cultured meat, seeing it as chemi- cally produced and heav-
New research by the University of Sydney and Curtin University pub- lished in Frontiers in Nu- trition, found that despite having a great concern for the environment and ani- mal welfare, 72 percent of Generation Z were not
University of Sydney’s lead researcher for the study Dr Diana Bogueva said they have found that Generation Z – those aged between 18 and 25 – are concerned about the en- vironment and animal welfare, yet most are not ready to accept cultured meat and view it with dis- gust.
the rich and powerful and were determined not to be convinced to con- sume it.
increased consumption of fruit and vegetables, say- ing they will stick with a vegetarian diet
However, despite their lack of enthusiasm for the new meat alternative, 41 percent believed it could be a viable nutri- tional source because of the need to transition to more sustainable food op- tions and improve animal welfare.
meat, and many view tra- ditional meat eating as being closely tied to con- cepts of masculinity and Australian cultural iden- tity,” Dr Bogueva said.
Gen Z’s five main at- titudes towards cultured meat
59 percent of partici- pants were concerned about the environmen- tal impact of traditional livestock farming specifi- cally, however many were not clear on what those impacts were nor did they understand the associated resource depletion.
respondWenths eastphoeterntiatl’lsy frocomuldtbheemabstreereedder farm to ‘resource consuming’ and • 9 percent accepted ed-
not beinpgr‘oencvierosnsmienngtalp- laibnlet oinrsefcrtseeburtarnejgecetedrun to t ly friendly’,” Dr Bogueva cultured meat as it was too
“In-vitro meat and other alternatives are important as they can help to reduce greenhouse emissions and lead to better animal welfare conditions,” Dr Bogueva said.
described cultured meat The researchers collect- as ‘another thing our ed Generation Z’s opin- generation has to worry ions of cultured meat via about’ and questioned the an online survey.
“However, if cultured meat is to replace live- stock-based proteins, it will have to emotionally and intellectually appeal to the Gen Z consumers.
and ‘a smart move’ by
about their demographics’
“It may be through its physical appearance, but what seems to be more important is transparency around its environmental and other benefits.”
cerned that they will be left with the legacy of ex- ploitative capitalism, that benefits only a few at the expense of many.
was necessary to accept and consume.
Gen Z’s concerns about cultured meat
“They have witnessed such behaviour resulting in climate change and are now afraid that a similar
They were also asked their preference for differ- ent meat alternatives, such as insects, plant based and cultured meat.
The participants had several concerns relating to cultured meat, includ- ing an anticipated taste or disgust, health and safety, and whether it is a more sustainable option.
Research from the Uni- versity of Sydney
“G
en Z value Australia’s larly as investors a
We
of quality livestock and culturedmeat.”
Others were concerned
about animal welfare,
whereas some viewed ily processed
cultured meat as a con- • 11 percent rejected all spiracy orchestrated by alternatives in favour of
Several participants
• 35 percent rejected
e also unsure whether cultured meat was an en- vironmentally sustainable option.
cultured meat and
wer
ral’ and are ‘normal’ unsure whether cultured • 28 percent believed meat is actually more cultured meat was ac- environmentally sustain- ceptable, or possibly ac- able, described by several ceptable if the technology
“Generation Z are also
said. artificial and not natural “The respondents were like insects.
edible insects but accepted plant- based alternatives because they ‘sounded more natu-
our national team has the technical e
market intelligence and industry cont
effectively divided into How the research was two groups: the ‘against’ conducted
you in making the most of your prope
Talk to us today
motivations of those de- The group of 227 ran-
veloping it, while support- ers described it as ‘money invested for a good cause’
domly selected, Austral-
Will Gurry
were asked questions
Chri
people who are ‘advanced
dietary preferences such
thinkers.’
as how often they liked
“This generation has to eat meat, how they felt vast information at its fin- about cultured meat and
ian-based respondents
Valuations & Advisory Tran
0488 553 988 041
gertips but is still con- whether they thought it
Page 12 – National Poultry Newspaper, October 2020
Societal concerns were also prevalent throughout the study, with a large number of respondents worried that eating cul- tured meat would be in conflict with perceptions
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