While many chicken meat exporters around the world are worried about a US cash splash to prop up its own poultry industry, Australia is not among them. Indeed, some trade experts say the US shakeup will likely provide handy advice on how growers can negotiate with processors. In the US, like Australia, power in the chicken meat industry lies with the processors who are often vertically integrated companies who control hatchings, feed, shedding and most stages along the path to the factory. The US last week announced $500 million in spending to expand processing capacity and "increase competition in meat and poultry processing to make agricultural markets more accessible, fair, competitive, and resilient for American farmers and ranchers". The chicken meat industry is just one agricultural market winning attention under President Biden's directive on promoting competition to "help farmers, ranchers, farmworkers and consumers all get a fair shake". The US Department of Agriculture will spend $500 million in American Rescue Plan funds to expand domestic meat and poultry processing capacity so growers have more choices. Australia's chicken meat industry is basically flat out supplying Australians' growing appetite for chicken. About half of all meat eaten by Aussies is chicken. In 2020 Australians consumed around 43.79 kilos of poultry on average per year and by 2029 it is expected that poultry consumption will show year-on-year increases to reach 45.23kg. With such a growing demand the industry is focused on the domestic market, overseas exports count for less than $100 million each year. And the US is not one of the bigger markets. Australian Chicken Meat Federation executive director Dr Vivien Kite said the US spending moves were "unlikely" to have much impact in Australia. But at the core of the Biden strategy, is to break the stranglehold the big processors have over their growers. Now that is something the Australian industry has been calling for across several decades, according to National Farmers Federation senior economist Ash Salardini. Mr Salardini said poultry farmers were often in a poor bargaining position because of their relative size. "What they are trying to do in the US is something we would like to see happen here as well," he said. Australia's two largest integrated chicken companies - Baiada Poultry and Inghams Enterprises - supply approximately 70 per cent of Australia's meat chickens. Typically the companies negotiate contracts with either individual growers or growers directly associated with their own company. The gross value of Australia's chicken meat production is about $3 billion annually. Start the day with all the big news in agriculture! Sign up below to receive our daily Farmonline newsletter.
