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Investors Eye Poultry Industry

by 5m Editor
22 June 2009, at 9:29am

AUSTRALIA - Investors see potential in the poultry industry in South Australia.

Poultry has emerged as a key sector for investors, as processors continue to expand and the global food crisis sharpens the focus on industries which can deliver protein in the most efficient and cost-effective manner.

Farmonline reports that Adelaide-based Colliers International Rural and Agribusiness' Jesse Manuel said in terms of volumes consumed, chicken meat is close to replacing beef as Australia's preferred meat, mainly due to the industry's success in reducing supply costs and retails prices, and through continuous product innovation and efficiency.

"The chicken meat industry has reduced supply costs by consistently raising both on-farm and off-farm productivity over several decades, through a combination of better management, genetic improvement, economies of scale and mechanisation in processing," Mr Manuel said.

"Since the early 2000s, major asset transfer activity in the local industry has been centred upon the restructuring and reconsolidation of larger producers.

"This happened earlier in the eastern states. However, due to urban encroachment in some semi-rural areas, intensive livestock operations are being squeezed out on both land-value and environmental grounds."

Mr Manuel said he anticipated well-positioned existing producers and agribusiness funds/institutions with positive long-range investment strategies to position themselves to be major players in poultry.

"On top of this traditional commercial property, investors are really making some headway into the sector due to the ability to diversify their portfolio," he said.

Mr Manuel told Farmonline that poultry farms and chicken meat processing facilities are generally located within 100 kilometres of major capital cities, however in the eastern states urban development is rapidly expanding and placing pressure on the regions where some of the smaller and older farms reside.

"Underlying land in those regions has increased in value significantly and as a result the industry is intensifying in regional South Australia," he said.

"The Lower North is fast becoming the hub of the broiler industry in SA."

Colliers International recently sold a substantial broiler farm with a capacity of over 400,000 birds for over $5 million.

"The response during the campaign was extremely encouraging with a varied list of prospective purchasers showing interest, but it was ultimately purchased by a Sydney investor."

Mr Manuel said that current opportunities include breeder and broiler farms in SA, Victoria and New South Wales, ranging from $3 million to $18 million.