World meat industry news

The beginning of the barbecue season and the growth in demand for meat led to some increase in prices for it. In the week from May 30 to June 5, retail prices for chicken meat increased by an average of 2.4%, according to Rosstat data. During this period, pork fell in price by 0.2%, the price of beef remained almost unchanged, mutton rose in price by 1.4%. In May, the average price for meat and poultry increased by 1.7% compared to April, including chickens became more expensive by 5.4%.

Earlier, the increase in wholesale prices began. Pork began to rise in price after broiler meat, prices for which have been strengthening over the past month. The beginning of the barbecue season, which took place at the end of April - beginning of May, this year fully met the expectations of sellers and producers, and even seems to have surpassed them, since sometimes there was not enough marinated meat on store shelves, Albert Davleev, President of Agrifood Strategies, shares his observations. “And this despite the fact that domestic pig breeders have significantly increased production and retailed a much larger amount of meat for barbecue, kupat and sausages,” he draws attention.

Director General of the National Union of Pig Breeders (NSS) Yuri Kovalev notes that the barbecue season has traditionally contributed to some increase in wholesale prices for pork, despite the fact that in the first quarter there is traditionally a decrease in prices amid low demand and fairly high production. “But in general, for 5.5 months of this year, the average prevailing price for live pigs is 5.5% lower than in the same period of 2022,” he commented.

According to NSS calculations, the current prices established in the first ten days of June lag behind those levels that were in the barbecue season a year earlier by 5%. “This is absolutely predictable, since we continue to increase production, which for five months of this year amounted to more than 5%,” says Kovalev.

There is no pork import to Russia, he reminds. Exports have slightly increased. “According to our estimates, it is 35-40% higher in the first half of 2023 than in this period a year earlier, but only because there was a low base in the first half of last year - the indicator fell sharply relative to previous periods and now it is just is restored to previous levels,” says Kovalev. For the whole year, according to the forecasts of the Union, pork prices will be 5-7% lower than in 2023 due to the fact that the supply is increasing due to the increase in production.

As in the past year, there has been a significant increase in sales of turkey meat - both marinated and in the form of the same sausages and kupat, as well as simply in the traditional cuts of breast and thigh fillet, says Davleev. “Turkey is increasingly entering the meat diet of Russians and is becoming especially popular during the barbecue season, providing consumers with a good alternative to pork and chicken,” he adds.

Demand for the entire line of turkey products continues to be higher than supply. It is growing primarily due to the fact that the Russian consumer is convinced of its usefulness, dietary qualities and saw the wide possibilities of its use for preparing a wide variety of meat dishes due to the unique combination of white and dark meat. “An important factor in the growth in demand is also the significant expansion of the physical availability of turkey for an increasing number of Russians due to the increased penetration of retail chains of various formats into less urbanized and more remote regions of the country,” Davleev said. It is modern retail that is the main driving force behind the sale of turkey products, and it is it that opens up ever wider opportunities for manufacturers to sell new types of products, especially meat and sausage products and ham, the demand for which is growing at an accelerated pace.

Rincon Management Executive Director Konstantin Korneev says that the barbecue season, as before, has increased the demand for meat and poultry. “Moreover, we note that the share of meat in the structure of the “barbecue basket” has increased compared to previous seasons due to a decrease in related products. It became the basis of the barbecue table,” he shares.

As for prices, of course, at the start of the kebab season, they have grown, but this year, especially in the poultry segment, this factor is not the only driver of the rise in prices, although it has made its contribution, the expert continues. “Prices for poultry are at a high level, including due to not the most favorable epizootic situation, as well as problems with the supply of technological equipment to poultry farmers,” said Korneev.

He finds it difficult to predict how meat prices will develop in the future, but notes that, for example, pork exports to Belarus, Armenia and other friendly countries of the near abroad have increased, which gives producers greater variability in trading activities.

When it comes to purchasing power, you need to look at the cost structure as a whole. After all, for example, it happens that a person refuses to buy expensive clothes, but decides to treat himself to something from food, and this strategy rather speaks of an observed change in the consumer basket.” Therefore, it is now especially important to conduct professional research that would reveal changes in consumer demand in different categories of food and non-food products, the expert is sure.

As for the impact on the meat industry of the situation in the Belgorod region (the largest meat-producing region), where shelling continues, it is not yet felt in the NSS. “All pig-breeding enterprises continue to work steadily, if there are temporary interruptions in the operation of feed mills somewhere, then at the expense of other capacities it is possible to resolve issues with the supply of feed,” Kovalev knows.

There are two turkey-breeding farms in the Belgorod region, and, according to Davleev, they continue to work. “The share of these farms in the volume of turkey production in Russia is small, but colleagues in the shop are worried about the Belgorod poultry farmers and hope for an improvement in the situation,” the expert adds. The industry plans to increase turkey production this year by about 10%, so every kilogram of turkey is very important for the market, the head of Agrifood Strategies emphasizes.