Chicken is firmly established as Australia's second favourite meat, after beef, and consumption in the early 1990s showed a continuing upward trend. Poultry production for meat is rated as the 6th most important rural activity in Australia today, in terms of the farmgate value of its production. Its retail sales are estimated at $1.2 b annually and have exhibited strong but steady growth throughout the 1970s and 1980s.

The industry has a brief history when compared with the more traditional Australian livestock industries and no official Government records were kept until the mid 1960s so it is difficult to say when intensive poultry production began. However industry sources estimate that about 3 million broilers were produced in 1950-51, compared with about 290 million in 1989/90. The birth place of the industry was the outer Sydney metropolitan area.

The industry is an extremely capital intensive industry which requires a large degree of stability and predictability if there is to be any future investment. Present capital investment is in excess of $650 million. It directly employs between 12 000 and 15 000 people nationally, about 4 people/1000 bird throughput.


Chicken meat (broiler) production is located relatively close to areas of consumption. Besides the main areas around the capital cities there are substantial broiler farms around Tamworth and Newcastle (NSW.), Geelong (Vic) and Murray Bridge (SA). Location is determined mainly by the economics of transport in relation to markets, feed and processing facilities. Availability of reticulated or reliable water and electricity is also a factor. This concentration of the poultry industry in specialised areas in Australia causes the industry problems arising from attitudes of municipal authorities, planners, urban dwellers and conservationists.

These pressures in time may force the poultry industry further out into less suitable areas. Most commercial enterprises are intensive highly mechanised units which occupy relatively small areas compared to other forms of farming. Broilers are run at high density on litter floors in houses ranging from open naturally ventilated structures (near a large lake is ideal) in the warmer climates to fully enclosed controlled environment houses in colder climates.


The chicken meat industry operate largely through vertical integration with company ownership of breeding farms, multiplication farms, hatcheries, feed mills, some broiler growing farms and processing plants – see diagram below. All operations from breeding through growing, processing and distribution are accurately timed and costed.

Two large integrated companies supply about 80% of the day old broiler chickens hatched and process almost three quarters of the broiler chickens marketed in Australia. The remaining 25% is shared among 5 medium-sized companies, and a myriad of small processors and hatchery men.


About 1 000 growers produce about 75% of total production under contract to processing companies. The balance is produced by a small number of large company farms. A typical family farm would house 60 000 broiler chickens and produce 200000-300 000 birds per annum.


Production of chicken meat was estimated at 432 000 tonnes from slaughterings of 309 million birds, at an average dress weight of 1.42 kilos each. Chicken production has increased by 25% over the last decade in response to continued growth in consumer demand. Domestic consumption has risen by the same amount and currently stands at 23.1 kg/person/pa. Total poultry consumption is now about 25.1 kg per person/pa.

Turkey is the next most popular poultry meat with Australian consumers.


The industry uses about 500 000 tonnes of wheat as a major component of prepared stock feed per annum and is a relatively stable buyer all year and from year to year. It uses more than three quarters of all the meat meal produced in Australia and is a larger consumer of electric power; petroleum products and water.


The gross value of retail sales of the chicken meat industry in 1989/90 was estimated at $1.2 billion In terms of farmgate value, poultry meat ranks as the 6th most important rural industry in Australia, and was worth $790m in 1989/90 and $845 million in 1990/91. This represents an increase in gross value of production of 70% in 5 years.


The rapid growth of the chicken meat industry over the past 20 years has resulted in a much greater emphasis being placed on poultry relative to other food items in the Australian diet, particularly red meat. There has been continual changing emphasis for convenience foods, such as take-away chicken, Chinese meals and TV dinners. Chicken meat has played an important role in these areas.

The share of disposable income spent on food has been relatively constant at about 16%. This clearly indicates that price and choice have been the key determinants of consumer spending. While the percentage of total food consumed has not varied greatly between categories, the variances in consumption of meat types has been dramatic.

Meat is a very volatile commodity, being subject to the trends in export markets and local climatic conditions. These factors are then further affected by consumer preference and choice.

The average Australian per capita consumption of chicken meat today is around 23.1 kg, an increase of 25% since 1981. This is forecast to continue to rise to around 28.6 kg per capita by 1992. Chicken is now firmly established as the second most popular meat choice of consumers, well ahead of sheepmeat (23 kg) and pigmeat ( 17 kg), and steadily overhauling beef on 38 kg.


Poultry processing plants, together with all the other production areas in an integrated operation, have developed in proximity to markets and a ready source of labour. Almost all integrated operations are established in or within a 50 km radius of capital cities. The obvious advantages are in distribution costs, labour availability and services.

Significant disadvantages are emerging as suburbia encroaches, for example, limitations on expansion, effluent treatment and cost of disposal, livestock transportation through the cities and noise pollution.

The integrated nature of the industry is the principal factor impeding a shift in location of poultry processing plants as the establishment cost of replacement facilities is exorbitantly high.

The replacement cost of a typical 8 000 bird/hr plant is around $9m while an integrated operation of 300 000 birds/week embracing feed mill, fertile egg production, hatcheries, growout and processing requires around $50 m in fixed and operating capital.

The trend is to improve productivity in all areas to meet increased demand rather than to relocate. More emphasis in processing plants on reduction of water usage, effluent treatment and recovery, and shift work can increase the terminal capacity of most plants in Australia today - see diagram above.

It is likely that the relocation of poultry processing plants to decentralised areas will occur when expansion demands require such increases in all the production areas that a totally new integrated complex may be undertaken. The advantages of such factor feed costs, environmental aspects and labour stability outweighs the advantages of close proximity to the market.

Poultry has improved its price relatively in comparison with other meats progressively and at times spectacularly during the life of the industry. Much of this improvement has been attributable to the progressive and continuous automation of poultry plants.


Alongside the siting and location of poultry plants is the siting and location of chicken growing farms. Processing companies, be they totally integrated or in processors, prefer their contract growers to he located close to the processing plant, preferably within about a 50 km radius. Important factors affecting location are:


Monarto in South of Adelaide is ideal for the location of such intensive land uses because:


Poultry meat is marketed throughout Australia by the large 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 whatsoever.

Limited media advertising support is given to poultry by processors. The only advertising poultry receives is through the supermarket industry (point of sale price being the main feature) and through the major fast-food take-away chains.

The poultry industry as a whole does not promote its product through the media, as it has historically been shown that consumption is related to price and that the percentage consumed varies only in relation to other meats as discussed earlier. Individual processors are however endeavouring to increase poultry consumption with the introduction of more varied ways of presenting poultry to the consumer, for example, pieces packs and further processed poultry products. Nevertheless individual companies are now using more television advertising than ever before.

Poultry numbers 1987 to 1989 ('000) Australia 1989


1988 1989 NSW VIC QLD SA WA Tas NT ACT
Hens and pulletsfor egg
13506 13463 13193 4505 3143 2748 1043 1116 297 122 219
Meat strain chickens
39187 47988 39709 17373 6659 7683 3764 3667 464 99 -
Total:     55579 64201 56149 24699 9802 10431 4807 5210 760 221 219

Ducks         350 663 263 151 106 1 1 2 1 - -
1249 1585 1125 965 114 1 15 29 1 - -
Other poultry       
430 365 420 156 108 34 17 34 71 - -

Total all poultry        
57608 66813 57957 25972 10130 10467 4840 5275 833 221 219


Item Unit     

1982 1983 1984 1985 1986 1987 1988 1989 1990

Poultry meat Slaughterings mill.       
227.7 231.2 240.0 268.0 276.5 290.9 290.2 296.6 308.7

Average dressed weight kg      
1.3 1.3 1.3 1.4 1.3 1.4 1.4 1.4 1.4

Production kt        
298 302 315 365 370 394 406 415 432

Exports kt     
2.7 1.3 1.1 1.4 2.5 2.5 1.4 1.5 2.0

Total consumption kt      
295 300 314 363 368 391 404  414 430

Consumption/person kg     
19.5 19.5 20.2 23.0 22.8 24.0 24.5 24.6 25.1

Source: Aust Chicken Meat Federation

The industry is dominated by just 3 companies which together account for about 98% of the total market. For a successful broiler enterprise it is necessary to have a production contract with one of them.

The new breeds of chicken pioneered by the large producers have produced birds with low fat, low cholesterol and with a long shelf life by reducing the risk of salmonella poisoning.

The industry is currently enjoying popularity in the market place as consumption of this form of white meat steadily increases. The birds have a very high feed conversion ratio of 1.8 kg of feed producing 1 kg of white meat. This is the highest conversion ratio of any of the white meats.

The Poultry Meat Industry is governed by state legislation the relevant acts are generally concerned with licensing, health and the control of production. For example, in South Australia the Poultry Meat Industry Committee will only grant approval for the establishment of a new poultry enterprise "if it is satisfied there is a demand for the supply of chickens for processing that can not reasonably be met by the operators of approved farms using existing facilities".


Under the terms of the contracts growers provide shedding and equipment of a prescribed standard and labour to grow the chickens from day-old to market weight. A typical property has about 1 672 m2 of shed and occupies about 2.5 ha. An investor in a broiler enterprise has the choice of either buying an existing poultry farm or entering into a new contractual agreement with one of the big producers.


The improvements directly related to the chicken enterprise are as follows:


Intensive farm systems such as those described here have caused a great deal of environmental concern because of problems caused by the disposal of effluent. This has led to statutory controls on intensive land uses and in some cases, the outright prohibition of an intensive land use. These problems are particularly pertinent in water catchment areas.

The valuer must ascertain whether there are "orders" over an intensive land use from the relevant authority and if so, what construction and controls are required to satisfy the orders. Draconian controls and orders may make the land use uneconomic and no longer the "highest and best use" of the land. Such controls are a very good example where the outside legal environment directly affects and determines the land use system.