Australian Poultry Farm Landscape through the lens of Henry Brown

The Australian chicken meat industry is a highly efficient and organised industry that has developed rapidly over the past 60 years and is now a well-established and accepted industry rivalling traditional industries such as sheep, beef, veal, and pig meat. Predominately Australia’s poultry production is consumed domestically with exports accounting for approximately 1.00% of industry revenue. AgriFutures Australia reports that the Australian chicken meat industry is worth $2.78 billion (gross value of production 2019-20), compared to $2.72 billion in 2018-19. The industry has an approximate retail value of around $6.6 billion.

The dramatic increases in chicken meat production are reflected by steady increases in domestic consumption with technological developments within the industry allowing economies of scale which have reduced prices to consumers with chicken meat now ahead of beef and veal as Australia’s most preferred meat. Growth in production and demand for free-range chicken meat has been particularly strong over the past five years (approximately 15% of the total market) and this trend is expected to continue.

The impacts of COVID-19 containment measures continue to increase consumers' reliance on domestic agricultural products within supermarkets. Australia’s major supermarkets have significantly reduced poultry prices due to their competitive approach for market share in the Supermarkets and Grocery stores industry. This price reduction has led to an increase in demand at the consumer level and placed price pressure on the number of birds supplied by the Poultry Meat Farming industry.

In recent years there have been several institutional agricultural investment funds that have entered into the poultry industry with numerous larger transactions of contracted broiler chicken farms being acquired by these funds. Of note, the multiple acquisitions by AAM Investment Group of South Australian-based Inghams contracted farms. ProTen have also been active in recent years with multiple large value quantum acquisitions and are currently the largest producers of broiler chickens in Australia, reportedly producing approximately 20% of Australia’s chicken meat requirements.

These agricultural funds are well capitalised and able to meet the ongoing capital expenditure and upgrade requirements, to ensure efficient production of their facilities, not only through scale but to meet the increasingly tighter growing requirements dictated by the processors.

We anticipate this strong demand for ‘In Use’ contracted Broiler Chicken Farms to continue, underpinned by the strong fundamentals for the chicken meat in Australia and the favourable investment returns achievable.

Peacefield Farms

I have had the opportunity to personally be involved in the full cycle of the Peacefield Farms having undertaken the valuations from their initial development finance through construction and ultimately to sale. 

The two recent transactions of the Peacefield Poultry farms being two Inghams contracted Broiler Chicken Farms within South East Queensland’s Scenic Rim Region, which were well contested on the open market. Both sales were purchased by two private parties, being existing Ingham’s contracted growers within the same Ingham’s grower pool within South East Queensland.

Both sales transacted at the upper end of market parameters, with the purchasers buoyed by the strong fundamentals and recently constructed ‘as new’ condition of the poultry improvements. Both properties transacted with existing Development Approval for additional poultry sheds, which is becoming increasingly difficult to obtain, particularly within the Scenic Rim Regional Council local government area.

These sales indicate the strength in the market for ‘In Use’ contracted Broiler Farms, with the market being underpinned by sound fundamentals and attractive investment returns.

If you would like any further information on the Peacefield Poultry sales or the market for Broiler Chicken Farms in Australia, please feel free to contact me.

Header Image by Colliers.

Henry Brown
Associate Director
— Brisbane
CPV
  |  LinkedIn

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