R & D Plan for the
Chicken Meat Program 2004 - 2009
This is the second such Plan. It identi.es four main Goals for the investments made on behalf of the industry and the Australian Government.
Each of the Goals will be pursued through a set of inter-connected Strategies, and Measures of Success which are identi.ed for each Goal.
The Plan responds to the research priorities that have been articulated by the Commonwealth, and to the Corporation’s own Corporate Plan 2003–08. It also re.ects careful consideration of the implications of the establishment of the new Australian Poultry Co-operative Research Centre, of which RIRDC is a core partner.
The Plan is for all stakeholders in the industry. It will of course be a key document for RIRDC’s Chicken Meat Committee, providing guidance for its future investments.
The Plan will be implemented in accordance with the provisions of the Primary Industries and Energy Research and Development Act 1989
Simon Hearn
Managing Director,
Rural Industries Research
and Development Corporation
Chicken meat consumption per capita in 2002/03 is predicted to reach approximately 33.8kg, forecast to rise to 36.5kg in 2005/06. It is poised to replace beef as the most popular meat of Australian consumers in the coming year. Consumption has increased 27% over the past decade, and is expected to continue increasing at between 1-5% pa for at least the next .ve years.
Production in 2002/03 was around 650,000 tonnes of chicken meat from 420 million birds processed. Approximately 98% of the total output goes to the domestic market.
The relative price of chicken meat has fallen consistently over the past few decades, due largely to automation of processing, genetic improvements in the birds used and enlightened on-farm feeding and management practices.
Production is dominated by several large, vertically integrated, privately owned enterprises who own hatcheries, feed mills, broiler and breeding farms, and processing plants across a number of States, and who contract growing on a per bird basis to independent broiler growers. Three such companies collectively process around 75% of total product and are geared to meet the demanding requirements of major customers such as the major supermarket chains and quick service restaurants. Processors are regularly audited by their major customers.
Of the live bird, approximately 70% by weight can be converted to chicken meat products for human consumption. Virtually all of the residual goes into a range of products mostly destined for the livestock feed and pet food markets.
One modern processing plant identi.es 140 distinct chicken meat products, taking into account variations in size, cut, value adding, and so forth. Fastest demand in growth is in the ‘raw value added’ and ‘cooked further processed’ product ranges, while demand for fresh whole birds is relatively static.
There are around 850 independent growers producing some 80% of chickens under contract to processing companies at a fee of around 52.5 – 55.0 cents a bird. Processors supply day old chicks and feed to these growers, and collect the grown birds. Each chicken consumes around 5kg of feed in its lifetime, and the chicken meat industry uses two million tonnes of feed annually – including some 50% of the meat meal produced in Australia.
Processing costs represent approximately 34% of the total costs of production of dressed chicken meat. This includes labour, equipment, packaging, marketing, storage and distribution costs.
Costs of producing a live
meat chicken break down approximately as follows (running average):
Since 1975 feed conversion
efficiency across the Australian industry has improved by approximately
40%; the time taken for the average broiler chicken to reach a live weight
of 2.0 kg over this period declined from 64 to 35 days.
These gains can be attributed
largely to signi.cant improvements in the genetic stocks used (responsible
for about 60-70% of the improvement and achieved through conventional genetic
selection) and improvements in bird nutrition, bird health, housing standards
and husbandry practices.
Research in the chicken meat
industry is currently undertaken and/or funded by:
The newly formed Australian
Egg Corporation Ltd (AECL) also has an extensive R&D Program, with
some areas of shared interest with the chicken meat industry.
From July 2003 the Australian Poultry Cooperative Research Centre, a major new player in the R&D funding arena, will commence operations.
Chicken Meat and Stock
Feed Companies
A large proportion of research
and development relevant to the Australian industry is actually undertaken
by industry participants themselves. The major integrated chicken meat
and/or stock feed companies conduct some basic, and a considerable amount
of applied and developmental research in the areas of nutrition, husbandry
practices, disease, product development, processing technologies, quality
assurance and market development. These companies employ nutritionists,
veterinarians, microbiologists, food technologists and back up technical
and laboratory staff. Major producers and distributors also undertake a
signi.cant amount of economic and marketing research.
In some .elds, companies within the industry are better placed to carry out the necessary R&D and/or technology transfer than are external research organisations.
In other cases, outside research providers are contracted to undertake R&D in relevant areas on behalf of the companies. The results of private sector research are normally only initially available to the companies concerned, although leakage to other industry participants usually occurs eventually.
Breeding Companies
International breeding companies
supplying chicken genetic material to the Australian industry invest signi.cant
funds in R&D in order to sustain continued genetic improvement in their
lines and hence to maintain their competitive position in the market.
Pharmaceutical and Feed
Additive Companies
Pharmaceutical and feed
additive companies servicing the poultry industry are largely owned by
multi-national companies. The majority of their basic and applied research
is conducted by the overseas parent company. However some poultry work
is conducted from time to time in Australia by these companies, particularly
to generate data to register their products locally. This is generally
limited to purely con.rmatory or .eld evaluation testing of products under
local conditions.
Vaccine Manufacturers
Australian vaccine manufacturers
and biotechnology companies have made signi.cant investments in the past
in the development of new vaccines and diagnostic technologies applicable
to the Australian industry. Basic and applied research in this particular
.eld has been quite extensive and has often been contracted out to external
research providers. Over the last .ve years, large multi-national vaccine
companies have been able to access the local poultry vaccine market. As
is the case with the pharmaceutical and feed additive suppliers to the
industry, the majority of their basic and applied research is conducted
by the overseas parent company. However, these companies do conduct some
poultry work in Australia, particularly to generate data to register their
products locally, but also to develop new products tailored speci.cally
to the Australian market.
Higher Education Institutions,
CSIRO and State Departments of Agriculture
A large amount of generic
R&D applicable to all of the industry is undertaken by Universities,
CSIRO, State Departments of Agriculture/Primary Industries and other public
or private research providers, with funding often being provided by RIRDC.
RIRDC’s Chicken Meat Program
The chicken meat industry
was one of the .rst rural industries for which a joint industry / Commonwealth
government funded research scheme was put in place, in 1969. The research
scheme was and continues to be .nanced by a levy on meat chickens hatched,
with a matching contribution from the Australian Government. The First
Annual Report of the Australian Chicken Meat Research Committee was published
in 1970. Subsequent reviews of the Acts covering the rural industry R&D
schemes led to this Committee being succeeded by the Chicken Meat Research
Council (from 1 April 1986) and the Chicken Meat Research and Development
Council (from 2 July 1990). In 1994/95, the CMRDC was abolished and its
functions merged with the Rural Industries R&D Corporation from 1 July
1995, from which point the Chicken Meat Program has been managed by a Chicken
Meat Advisory Committee of RIRDC.
Traditionally there has been an ‘on-farm’ emphasis to the work funded by the Chicken Meat Program of RIRDC and its predecessors, while the large integrated companies have focused on product development, processing, and marketing.
Overseas Research
In global terms Australia
is a small producer of chicken meat, and therefore a comparably small player
in global R&D. Continuing globalisation of the food industry and the
prospect of chicken meat imports to Australia underline the importance
of good access to global R&D. Australian researchers in this, as in
other .elds, have been effective in building international linkages, but
it may be that in the years ahead a more substantial and systematic investment
in accessing global R&D is required.
The Australian Poultry
CRC
The Australian Poultry CRC
formally began operations in July 2003. The CRC business plan projects
a budget of $78.8 million over seven years, including a core CRC grant
of $23.1million. There are .ve core partners – RIRDC, AECL, University
of Melbourne, UNE, and Bioproperties Pty Ltd – and .fteen supporting participants,
including the three major meat chicken companies.
The CRC’s aim is "to enhance the competitiveness of the Australian egg and chicken meat industries and supporting industries through the application of strategic programs delivering cost-effective and socially responsible production of safe, quality poultry products for domestic consumption and for emerging export markets". It will pursue this aim via three research programs – broadly, nutrition, health, and bird welfare and environmental management – and a closely correlated program of education and training. The key overall outcomes sought are as set out in the following table:
The CRC adds signi.cantly to the poultry R&D effort in Australia, and will therefore modify the operating environment for RIRDC’s Chicken Meat Program.
Some, but not all, of the potential impacts can be predicted. The most obvious impacts are entirely bene.cial – increased R&D effort – and the industry as a whole is of a size that ensures rich inter-connections amongst key stakeholders.
However there is a signi.cant issue of research capacity and a new research management challenge to ensure that synergy is maximised and duplication avoided.
Given that the CRC has barely commenced operations, a de.nitive demarcation is not possible, and probably not desirable. Nevertheless, construction of a new Five Year Plan for the RIRDC Chicken Meat Program has required careful thought about how the role of this Program should be re.ned and differentiated from that of the CRC – and how this can be communicated to all stakeholders.
Some principles and judgments about possible points of difference are emerging.
The following table summarises these:
3.
Key Issues for the Industry
The key issues for the industry
identi.ed below have been distilled from discussions undertaken with industry
stakeholders and from the outcomes of an industry strategic planning workshop.
As part of this workshop, a future scan was undertaken to identify major
trends taking place in the global food industry that impact on the Australian
chicken meat industry and an analysis undertaken to identify trends and
changes taking place in the Australian rural industries generally, and
the Australian chicken meat industry more speci.cally, that are likely
to affect the industry’s productivity and sustainability in the future.
Given these trends and changes, the workshop went on to identify major
potential threats faced by and opportunities available to the Australian
industry and to identify strengths and weaknesses in the overall national
chicken meat R&D capability.
Many of the key issues for the industry identi.ed in this analysis are enduring – .ock health and welfare, chicken meat safety, environmental management, consumer perceptions and concerns and feed cost and supply are prime examples.
Two that have now become salient are the prospect of chicken meat importation, and the use of antibiotics for maintenance of bird health and performance.
Importation has been a serious prospect for more than a decade. For the industry, the abandonment of long-standing quarantine barriers poses the dual risks of the introduction of exotic avian disease agents or human pathogenic bacteria, and the direct threat of increased competition. While the industry will continue to make its views on importation known in relation to the relevant trade negotiations, researchers need to anticipate the potential challenges to be faced if imports become a reality.
Along with other livestock production systems, pressure is mounting on the use of antibiotics in live bird production, with increasingly stringent regulations on antibiotic use being adopted. This pressure and increasing regulation is placing more emphasis on research into alternatives to antibiotics. Complete withdrawal of antibiotics, although not considered an imminent threat, would affect feed efficiency and increase mortality and morbidity of animals – all having the effect of increasing production costs and seriously impacting upon bird welfare.
A third key issue of quite a different kind arises with the successful inception of the Australian Poultry CRC. The CRC represents a very signi.cant increase in overall R&D investment. The industry is challenged to ensure that it can structure the optimal mix of long and shorter term, basic, strategic and applied R&D, and not only sustain, but increase, the research capability that is now required.
Consumer concerns relating to food safety and animal welfare persist. The industry is yet to .nd a consistent and effective way of dealing with certain negative or hostile public perceptions – even on such clear-cut issues as the supposed use of hormones in chicken production. The industry is particularly vulnerable to pressure group action against its major quick service restaurant customers. This points to an on-going need for public education, but perhaps also to the need for some investment in applied social science to better understand the dynamics of public perceptions and ‘issue management’.
Public awareness of, and regulatory involvement in food safety are both increasing; scrutiny intensi.es, and the potential cost of errors escalates. How can R&D best address this complex, multi-dimensional, whole-of-chain challenge? Are qualitatively new orders of collaboration required? Like food safety, animal welfare is a key challenge with signi.cant implications for productivity. Good practices in husbandry, and in collecting, transporting and handling birds prior to processing, can improve yield and also help protect the industry from misinformed criticism. While it is accepted that good welfare practices enhance product quality, the industry is particularly vulnerable to the negative consumer perceptions that can be generated by animal welfare campaigns.
Recently these have focused on major quick service restaurant chains such as KFC. Can R&D help underpin a proactive industry stance on animal welfare? Pressures have also grown in relation to environmental management matters.
The environmental impacts of most concern are the community amenity issues of odour and dust, and public health aspects of pathogens in the food chain from the use of poultry manures as organic fertilizers. Local government, EPAs and other agencies, and communities surrounding poultry farms are pressuring growers on a range of environmental matters.
While there are some occupational
health and safety issues generic to rural production, and to the food
industry, there are also some issues speci.c to poultry growing and processing.
As with environmental and welfare issues, R&D might assist with the
setting and monitoring of national standards.
Each of these broad themes
has a number of priority goals. All Australian Government research and
funding bodies have been asked to submit plans outlining how they propose
to support the four national priorities.
In March 2003, the Parliamentary
Secretary, the Honourable Judith Troeth, wrote to RIRDC outlining seven
government Rural Research Priorities. These priorities are:
The RIRDC Corporate Plan
2003-2008 addresses the government’s priorities whilst also accommodating
the future research and development objectives of its industry partners.
RIRDC recognizes that public and private research bene.ts are not incompatible,
and the national priorities will give useful guidance to future RIRDC industry
strategic planning processes.
The RIRDC Corporate Plan
2003 – 2008 identi.es four Goals:
In RIRDC’s Plan, these
four Goals are to be pursued through a set of Key Strategies which align
with the national research priorities.
The Chicken Meat Program’s
own R&D objectives and activities over the coming five years will address
those RIRDC objectives and strategies identi.ed in the Corporate Plan that
are relevant to the particular circumstances of the chicken meat industry
and its stakeholders. Particular emphasis will therefore be given to addressing
shared objectives of the chicken meat industry, RIRDC and government stakeholders.
Accordingly, how the Chicken Meat Program’s key strategies align with and
therefore address the RIRDC Board’s overall objectives and the National
and Rural Research Priorities, will be summarised at Attachments 1 and
2 respectively.
5. Industry Vision and Program Objective
Vision:
The following vision for
the Australian chicken meat industry has been developed with industry participation:
"Our vision for the chicken meat industry is for an efficient, globally competitive, environmentally sustainable and pro.table industry with good industry and product images".
Objective:
The objective of the Chicken
Meat Program of RIRDC is:
" Through carefully focused
R&D, to support increased sustainability and pro.tability in the chicken
meat industry".
GOAL ONE: Improve the efficiency of chicken meat production
GOAL TWO: Enhance the quality and safety of chicken meat products, and improve the image of chicken meat products
GOAL THREE: Help to protect a sustainable production environment
GOAL FOUR: Improve industry’s
competitiveness, both domestically and internationally
Attachment 1: Alignment of program strategies with RIRDC’s corporate goals and strategies
Attachment
2:
Alignment of Chicken
Meat Program Strategies with National Research Priorities and Rural Research
Priorities
