World meat industry news

An increase in the cost of meat production may not affect wholesale and retail prices for products. The dynamics of the cost price does not necessarily reflect the further dynamics of wholesale and retail prices. Costs can go up and prices can go down, as they have done many times over long periods, as prices are a balance of supply and demand.

The cost of meat production began to grow back in 2018. In 2021, the cost of production began to increase due to rising prices for grain and feed components, and meat prices also increased last year, but the five-year dynamics of meat prices lags significantly behind the food inflation in the country over the same time. For example, pork has risen by 15% over the past five years, poultry by an average of 25% to 30%, and food inflation by 40%. This is due to the high security of the market.

In particular, according to his forecast, the growth of pork production this year can reach 5%. For poultry meat, we can quickly increase additional volumes, provided that we have the necessary financial resources for this, because today we need to buy incubation and breeding raw materials, feed at a virtually 100% prepayment, in connection with which the financial stability of poultry enterprises is important. Prices are being stabilized this year by a noticeable increase in meat production in the first quarter, and as a result, wholesale prices for pork and poultry meat have been declining rapidly over the past week and a half.

Meat prices will also be affected by the dynamics of demand associated with the income of the population. In order to make prices more stable, in the context of the allocation of multibillion-dollar state social support to various segments of the population, manufacturers seek to maintain production growth rates. This is the main protection against the dynamics of food inflation, which we are seeing in many countries of the world.