World meat industry news

The cost of a turkey, after a long rise, stabilized and began to decline, Izvestia was told at the National Association of Turkey Producers (NAPI). The reason is the fall in the price of other types of meat, primarily pork, as well as the growth in the production of poultry itself. The trend is unusual for November, when demand rises before the holidays. Until the New Year, the cost of a turkey may fall by 5-10% compared to the current level, market participants believe.

Pork held the turkey

The average cost of turkey meat from November 14 to November 20 decreased by 0.24% to 242 rubles per 1 kg compared to a week earlier. This is evidenced by the monitoring data of the NAPI, which Izvestia got acquainted with. The price of the main pieces has stabilized after a long rise. Breast fillet remains at the level of 316 rubles for the third week, although it has been continuously rising in price since the beginning of September. The thigh fillet costs 329 rubles for the second week, although the growth has been recorded since the end of July. The lower leg fell in price by 0.99%, to 143 rubles, the wing - by 0.96%, to 148.

The head of the National Meat Association, Sergei Yushin, pointed out that the main reason is the growth in the production of both turkey and other types of meat. According to Rosstat, from January to November, compared to the same time last year, poultry sales increased by 4.9%, to 5.3 million tons, pork - by 7.8%, to 4.3 million tons. a slight decrease in beef production (by 4.4%, to 830.4 thousand tons) and a reduction in consumption due to a higher price, the market cannot absorb the entire additional volume of three types of meat, Sergey Yushin explained. And oversupply puts pressure on prices.

Turkey producers will be forced to reduce the cost of their products, said Anatoly Velmatov, executive director of NAPI. Otherwise, there is a risk of losing the buyer, who in the current conditions will choose cheaper protein. Pigs in live weight at the end of October cost 114 rubles per 1 kg, which is 12% lower than at the same time last year, and the price of a broiler carcass fell by 11%, to 142 rubles per 1 kg.

Anatoly Velmatov is confident that the downward trend in prices will be long-term. An Izvestia source among market participants predicted that by the end of the year, the cost of a turkey could fall by 5-10% compared to current prices.

Turkey falls on the New Year's table

The cost of all types of meat usually decreases from mid-December, and the trend continues in January and February, Anatoly Velmatov explained. But November and the first half of December are periods of increased demand from meat processors and chains, which during this period form a stock before the New Year. Traditionally, this resulted in an increase in the cost of meat, but this year the trend is reversed, Anatoly Velmatov said.

Agrifood Strategies President Albert Davleev believes that it is impossible to talk about a downward trend so far. But stabilization really is the last two or three weeks. The turkey market is determined by two types of cuts - breast fillet and drumstick fillet, which account for 60% of the output of this meat, and just the prices for them have frozen.

The last two weeks before the New Year, which traditionally account for peak demand for products, will be crucial for the cost, the expert believes. But now there may not be a sharp increase in consumption due to a decrease in incomes of the population. Another factor is the increasing availability of an alternative to turkey, duck, which is easier to roast due to its smaller size and is also a familiar holiday staple. This year, the duck has become more affordable and more widely represented in the chains, so it can draw some of the demand. As a result, the cost of a turkey may even grow before the New Year, but compared to November, the fluctuation is unlikely to be more than 5-10%, Albert Davleev believes.

The press service of Cherkizovo said that if you look at the data for ten months of 2022 and compare them with the same period last year, you can talk about an increase in the cost of breast fillet by 7%, and thigh fillet - by 8%. In relation to 2021, the company does not expect a price reduction for any position, the representative of the group added.

Izvestia's source in one of the retail chains confirmed that the volume of meat purchases for the New Year is now increasing. At the same time, turkey suppliers have not reduced prices yet, and some assortment is even becoming more expensive.

Lenta reported a slight decrease in prices for stock turkey. But it did not concern brand positions, the representative of the network added.

X5 Retail Group (Pyaterochka, Perekrestok, Karusel stores) and Damate agricultural holding declined to comment.

Grain lowers the price bottom

Turkey growers can still reduce the price, Anatoly Velmatov assured. First of all, due to the low price of grain, which is up to 50% in the feed cost structure. But the situation with profitability will worsen if the price of grain rises, Anatoly Velmatov warned.

Sergey Yushin added that the cost of feed additives has also stabilized. In 2023, the average wholesale price of pork and poultry may either remain at the current level or even fall, the expert predicted. This year, producers supported targeted social payments to citizens, part of which people spent on food, including meat. But it is not yet known whether there will be benefits in 2023 and in what volume, Sergei Yushin added.

The Ministry of Agriculture is confident that state support measures have helped maintain a “sufficient level of profitability in poultry farming”.

The downward trend in prices does not yet affect the investment plans of companies. According to Sergei Yushin, even now in pig breeding it is more about completing the construction of previously started projects than about the emergence of new ones. It is difficult to start construction because of the uncertainty with the prospects for growth in consumption and exports, as well as with the supply of imported equipment. In the poultry market, if necessary, it is possible to increase production at the expense of the current areas: not all farms are now 100% loaded.