World meat industry news

The Lipetsk Meat company plans to increase beef supplies to China this year to record volumes of 55 tons per day, or 20 thousand tons per year, which is almost half of all beef exports from Russia. The company delivered a trial batch of 137 tons in July this year. “Within two months, Lipetsk Meat plans to move from weekly deliveries to regular daily deliveries: at least two containers of products. The amount of contracts signed by the end of the year is 800 million rubles,” the company’s general director, Sergei Oganov, told Expert. — We will export frozen beef products of more than 40 types. At first, these will be products for B2B channels: wholesalers, processors and the HoReCa sector, but work has already begun on creating several types of semi-finished products, but which ones are still a trade secret.”

The Lipetsk Meat company was created in 2021 on the basis of the production facilities of the Albif company, one of the pioneers in Russia in raising beef cattle breeds. The slaughtering capacity of the enterprise is 84 thousand heads per year, or 58.8 thousand tons of meat. Investments in modernization and expansion of production over two years amounted to 250 million rubles.

Until July of this year, only two Russian companies could sell beef to China: Miratorg and Zarechnoye. They entered the Chinese market in 2020, and before that, China did not buy beef from Russia, just as it now does not allow Russian pork into its market. Last year, China accounted for 59% of the value of Russian beef exports, and in January-April 2023 - already 69%. In physical terms, the export of beef last year grew more than the export of all other types of meat, increasing by 10% with an overall increase in meat exports of 7–8%. “Our target is to export 70 percent of products and sell 30 percent on the domestic market,” says Sergei Oganov. — The company is preparing for certification to sell beef to the Middle East. In addition, by the end of the year we plan to begin regular supplies of beef to Africa.”

Russian meat processors are worried about whether beef will become more expensive due to increased exports. After all, there remains a shortage of beef in the country. According to the National Union of Beef Producers, last year about 1.67 million tons of cattle meat was produced, with a total production of all types of meat of 12.9 million tons (Rosstat data). The price of beef has risen by 27% in two and a half years, while the price of pork did not rise last year, and the price of chicken even decreased by 2.6%. It was the rapid increase in beef prices the year before that led to the Russian Ministry of Agriculture zeroing out the import duty (it was 15%). “Zero duties make it even more difficult to increase beef production; this will only increase its deficit,” says Roman Kostyuk, executive director of the National Union of Beef Producers. “We remain dependent on imports at 20 percent per year of total consumption, because industrial beef producers are not investing in expanding production. Our number of slaughterhouses is growing, but raw materials are becoming scarcer due to a reduction in the number of cattle. Therefore, the beef shortage is increasing.”

However, Roman Kostyuk is confident that the noticeable increase in beef exports will not affect the domestic price of beef. If, in general, meat exports account for no more than 5% of production volumes, then beef exports account for less than 3%. “Pricing here depends more on veterinary zones: in zones where there is foot-and-mouth disease, but they do not vaccinate, the price is somewhat lower, since meat from here cannot be sold for export. And in “clean” zones where livestock are vaccinated, beef is more expensive because it can be exported. Russian processors are content with beef from less prosperous areas at a low price.” President of the National Meat Association Sergei Yushin is confident that beef exports should be increased, despite its shortage. “When we export one kilogram of beef, consider that we are exporting six to seven kilograms of grain,” Sergei Yushin calculated.