World meat industry news

The general price vector of wholesale and retail food prices in the third and fourth quarters of 2023 is directed towards growth. Let's take a brief look at some of the key trends in the wholesale and retail segments.

Wholesale food prices

Corn. In the third and fourth quarters of 2023, almost all major types of grain generally increased slightly in price. This is mainly due to the devaluation of the ruble and the high degree of export orientation of these goods. The prices for peas increased the most. A record harvest was obtained, but by December 1, 35.8% of this harvest was shipped for export.

At the same time, corn prices weakened somewhat in the fourth quarter. Prices are also being reduced for some niche products in this category, for example, buckwheat.

Oilseeds and vegetable oils. Here, in general, in ruble terms, there is also a tendency for prices to strengthen. Soybeans and rapeseeds are rising in price. For sunflower, prices remain relatively stable, which is due to the high harvest and almost prohibitive export duties. With regard to vegetable oils, price strengthening was mainly observed for rapeseed oil.

Compound feeds and premixes. Following grain and oilseed prices, feed prices are rising. In addition to feed grain, meal, and oilseeds, pricing here is also affected by the increase in the cost of imported feed additives included in compound feeds and premixes.

Meat and meat products. Meat prices generally show an increase, which is especially pronounced in relation to poultry meat. This may be due to the high dependence on imported supplies of hatching eggs, imported feed additives and veterinary drugs, and a general increase in costs. In addition, there is no competition in the market from imported products. As the experience of foreign countries shows, imports are one of the most effective price regulators. For example, the USA is one of the largest exporters of poultry meat, but at the same time, to regulate the domestic market, they also import these products.

Egg. Prices for this product are rising due to several factors, including:

- seasonal factors. In the fourth and first quarters, production decreases slightly, which leads to a seasonal increase in prices. As a rule, prices begin to rise in September and rise until mid-April. On average (if we consider the dynamics over the past 5 years), during this time they have strengthened by almost 25%. This year the situation is abnormal; growth is noticeably higher.

In the II and III quarters, over 4 billion eggs are produced monthly, in the IV quarter 3.7 billion eggs, and in the I - at the level of 3.5 billion eggs. Until supply recovers, prices will not decrease.

- the situation on the meat market. With rising meat prices, the population is switching to relatively inexpensive alternative animal proteins - eggs. Let us remember that chicken prices first began to rise. In conditions of seasonal reduction in supply and growth in demand, prices strengthened.

- increase in cost. As with poultry meat, the prices of imported feed additives, veterinary drugs, hatching eggs, and equipment have increased in price; in recent months, prices for Russian-made feed have also strengthened somewhat.

Milk and dairy products. Every year in September-March there is a seasonal increase in prices for raw milk. Following raw milk, dairy products are also gaining in price, which is also happening this season. In general, when compared with the indicators of a year ago, there is no noticeable strengthening of prices for this category of goods.

Potatoes and vegetables. In the context of record harvests, potato prices are at their lowest levels in recent years. There is no upward trend observed.

As for cabbage, carrots, onions and table beets, here in November and December, after some weakening of prices in the first half of autumn, they observed some growth. In general, with the exception of potatoes, prices in this category of goods are noticeably higher than their level a year ago.

Prices for cucumbers, tomatoes, peppers, zucchini and eggplants in the fall and early winter show a steady increase, which, in addition to seasonal factors, is supported by the devaluation of the ruble (for zucchini, eggplants, peppers, supply at this time of year is largely formed due to imports, in relation to tomatoes also have a high share of imports).

- Fruits. With high stock levels following the completion of harvest, apple prices weakened significantly in late summer and early autumn (August - September 2023). However, their growth began already in October, and in November and early December this trend intensified.

At the beginning of 2024, the rise in apple prices may continue. This is due both to the general rise in price of fruits and to the reduction in imports of apples and the increase in prices for them in ruble terms due to the devaluation of the ruble. Also, price growth may be influenced by a reduction in apple harvests in Russia in 2023. There are no final statistics on collections for 2023 yet, but preliminary information on collections in the south of the country shows that the figures have decreased slightly. Recall that earlier, given the implementation 

announced investment projects, we expected that fees in 2023, on the contrary, would increase slightly.

If we consider the fruit category as a whole, the recent devaluation of the ruble has led to a noticeable increase in prices for goods in this category in the Russian Federation.

Sugar. Almost all the sugar in the country is produced from the second half of August to December, during which time sugar prices weaken. The increase in the supply of sugar can be facilitated by an increase in the raw material base. In 2023, the area under sugar beet increased by 3.6%. Sugar beet harvests by November 8, 2023, compared to the same date last year, increased by 23.5%. Sugar production in August-October 2023 increased by 14.8% compared to the same period last year.

Cereals and flour. The situation on the cereal and flour market is generally stable. There is no noticeable increase in prices. For some key products in this category, for example, buckwheat, barley groats (barley, pearl barley), and oats, prices have weakened (both in the fourth quarter and in relation to the level of a year ago). Prices for flour (both wheat and rye) have also decreased.

Cocoa raw materials. In the context of a significant increase in world prices for cocoa raw materials, as well as due to the devaluation of the ruble, prices for cocoa beans, cocoa butter, and cocoa powder on the domestic market are showing unprecedented growth.

Retail food prices

Expanded list of products, price changes over the year. Food prices in Russia in November 2023, compared to November 2022, generally show a significant increase. AB-Center analyzed the dynamics of retail prices for 123 goods, of which a decrease was observed in only 24 goods. Prices have strengthened for 99 items.

At the same time, price increases for some items look extreme. Price strengthening of over 40% over the year is demonstrated by 6 goods, from 20 to 40% - by 7 goods, from 10 to 20% - by 11 goods. As for the decline in prices for goods, it is much less pronounced. Thus, price weakening of more than 10% is observed only for three items.

In November 2023, the inflation rate in Russia was 7.47% (annualized for the last 12 months, according to the portal level-inflation.rf). An increase in prices above the inflation rate is observed only for 34 goods out of 99 that increased in price and out of 123 analyzed items in general. At the same time, calculation of the arithmetic average percentage change in prices for all analyzed items shows that, in general, food prices increased by 7.1% over the year.

Price changes for the week and month, operational statistics. Food prices continue to rise. AB-Center analyzed price dynamics for 43 food products as of December 11.

During the week, price strengthening was observed for 33 goods, weakening - for 10 goods. Over the month, prices increased by 34 goods and decreased by 9 goods.

Over the week, the growth to a greater extent (TOP-5 products) affected such food products as cucumbers (+9.5%), chicken eggs (+4.5%), carrots (+1.0%), beets (+0 .9%), onions (+0.8%).

Over the month, the most significant increases in price were cucumbers (+41.0%), chicken eggs (+18.6%), fresh tomatoes (+4.8%), apples (+2.8%), fresh white cabbage (+ 2.1%).

As for the weakening of prices, over the week prices mainly fell in granulated sugar (-0.8%), black long tea (-0.5%), chicken meat (-0.4%), millet (-0.4% ) and pork (-0.3%).

Over the month, the prices that decreased the most were sugar (-4.1%), buckwheat (-1.2%), millet (-1.0%), margarine (-0.5%), chicken meat (-0. 3%).