Per capita consumption of poultry in Australia fell during the year by 4.3% 28. This was one of the largest declines on record as COVID-19 reduced restaurant and food service demand. Combined with high feed costs as a result of the drought, the industry faced very challenging conditions. Nevertheless, poultry meat retains a strong price advantage over other popular meats and demand is expected to recover rapidly as the economy reopens. Significantly reduced supply of lamb and beef over the next few years is expected to enhance the competitive position of poultry meat.
The DPI provide quality assured laboratory testing services in the fields of veterinary pathology, analytical chemistry and plant health. DPI laboratory services undertake diagnostic testing to support surveillance, accreditation, export, diagnostic and emergency activities for animal and plant diseases in NSW and interstate. NSW DPI laboratory services is a network of NATA accredited laboratories across the state with laboratory facilities at Wollongbar, Menangle, Wagga Wagga and Orange.
NSW chicken production was down 2.5% in 2019-20 despite a 1% increase in slaughter due to a 3.5% decrease in average bird weight 28. COVID-19 had a large impact on demand for poultry meat in the last quarter of the year. Whilst sales through supermarkets surged as consumers stockpiled staples, sales through food service and restaurants declined. Approximately 38% of poultry sales are through supermarkets 101. Approximately 35% of sales are to food service and restaurants, one of the sectors most impacted by COVID-19 101.
As processors control substantial parts of the poultry meat supply chain, producer prices reflects both the price received by contract growers and other costs (including feed costs) incurred in rearing poultry to the processing stage. Producer prices were estimated to have risen by 2.3% 10, primarily due to rising feed costs. Retail prices were up 2.4% in 2019-20 115. Discounting to clear excess inventory during the last quarter of the year as a result of COVID-19 tempered the annual increase. Despite the price increases, poultry meat continued to improve its price competitiveness relative to red meats with beef’s premium to poultry for both producer prices and retail prices reaching new highs during the year.
Australia exports a relatively small amount of poultry meat, primarily to other countries in Asia. NSW exports increased 9.4% during 2019-20 to $24.2 million 94. Towards the end of the year a relaxing of import requirements created an opportunity for increased exports to Singapore.
COVID-19 has had a significant impact on the poultry meat industry due to the high proportion of sales to food service and restaurants. Specialty poultry such as quail and ducks were particularly negatively impacted. At the same time, high feed and water costs were already increasing overall costs for the industry. The COVID-19 induced oversupply limited price rises. This has created challenges for both farmers and processors and there has been some industry restructuring as a result. Nevertheless, poultry meat retains a significant price advantage relative to other protein sources. Reduced supply of beef and lamb, as farmers in those industries restock following the east coast drought, is expected to result in this price advantage continuing to increase. As a result, demand for poultry meat is expected to continue to grow and, once COVID-19 restrictions ease, the industry should rapidly recover lost volumes.