Chicken growers trapped: ‘We’ve got farmers bleeding, it’s as bad as the dairy farmers crisis’

A flurry of chicken farms have hit the market as growers give up on an industry ruled by two main processors and two major supermarkets.

The value of Australia’s poultry industry has broken the billion dollar mark, but producers aren’t sharing in the rewards with a record number of chicken farms hitting the market.

In March, the gross value of slaughtered poultry increased 1.5 per cent to $1 billion, according to the Australian Bureau of Statistics, but the last 18 months have been particularly tough for farmers who are “trapped” in unprofitable contracts with one of only a handful of processors.

Australian Chicken Growers Council acting chief executive Joanne Sillince said growers were caught between a rock and a hard place.

“You sign a horrendous contract (to process your chickens) or put the farm on the market,” Ms Sillince said. It’s led to the listing of about 70 poultry properties for sale across Australia.

“Out of a total of about 700 farms, that’s a very big percentage. Show me an industry where 10 per cent is for sale.”

The problem, Ms Sillince said, is a trading landscape where growers have one processor to turn to, which in turn is at the mercy of Australia’s two major retailers that control two thirds of the grocery market.

“The processors have become the proxies of the supermarkets and they are squeezing the farmers. The farmers have very little decision making power,” Ms Sillince said. “We’ve got farmers bleeding, it’s as bad as the dairy farmers’ crisis in 2017.”

She said one couple were selling up and going back into teaching because the money was better.

“We’ve got people with second jobs off-farm, which is difficult because you need to be on-site the whole time,” she said.

Ms Sillince said the only solution was for a mandatory poultry code of conduct, similar to the codes governing the horticulture and dairy industries.

But the federal government is yet to respond to the National Farmers’ Federation final report – requested by the Department of Agriculture, Fisheries and Forestry – released in April recommending a mandatory code of conduct “to rectify a lack of market transparency and competition in the industry”.

Second only to eggs, chicken meat is the cheapest animal protein available to consumers. And in a cost-of-living crisis, it’s a popular household staple.

Growers say the industry is beholden to two major processors in the privately owned Baida Poultry and the publicly listed Inghams, which collectively control 70 per cent of the industry.

In 2020, the Australian Competition and Consumer Commission recommended in its Perishable Agricultural Goods Inquiry that further regulatory action was needed to fix concerning practices and their impact on market transparency.

Former chicken farmer Gary Ekert said growers were likely receiving less for their chickens today than they were 15 years ago.

The NSW farmer was forced out of the industry after taking his processor to court for a breach of contract. He and the growers party to the proceedings won their case, but they were swiftly informed by the processor their farms were no longer needed.

“We sold our farm, our contract had come up for renewal and the processors told us we were one of three farms surplus to their needs,” he said.

Ms Sillince said she was hopeful Agriculture Minister Murray Watt would step in. But the time is now.

“The NFF report even gave the government a draft of an acceptable code, it’s all in there, all he has to do is say yes.

When asked whether Senator Watt was behind the industry’s push for a mandatory code, DAFF responded that it would be up to the chicken meat industry “to consider any arrangements for a voluntary code”.

The NFF’s report exploring the potential for a code of conduct to govern the industry said: “Growers saw no value or potential for a voluntary code of conduct to address the marketpower imbalance in the industry”.

“In many growers’ words, ‘a voluntary codewon’t be worth the paper it is written on,” the report said.

The Australian Chicken Meat Federation has been contacted for comment.