World meat industry news

Russians expect an increase in prices for several groups of socially significant goods, in particular, for meat and bread. This is due to an increase in production costs, with a large share of imported ingredients, said Elena Tyurina, a member of the Agrarian Committee of the Chamber of Commerce and Industry. We decided to contact her with clarifying questions.

– According to you, in 2021 Russia is fully provided with livestock products, there will be no shortage, moreover, there is even an export potential. At the same time, there is a high probability that meat will rise in price. Why?

– When feeding animals, premixes are used – protein-vitamin mixtures. Various veterinary drugs are also needed, also imported in large quantities. Changes in the foreign exchange and financial market lead to an increase in the cost of production and, accordingly, the final price. In addition, meat products – beef, pork, poultry, sausages – are extremely sensitive to the effective demand of the population. People are buying them less at new retail prices, which are made up of several components. This includes the cost of logistics, it also increases due to the rising price of gasoline. This includes growing labor costs: due to the pandemic in the domestic livestock sector, foreign, relatively cheap labor has significantly diminished. This is a chain that stretches from the manufacturer to processing and, finally, to retail chains. All these are objective prerequisites for further, 5-7 percent, growth in prices for meat products. Let me remind you that a chicken in a non-premium retail chain last year cost 100 rubles, now it is 140.

– And what is happening with our bread now? It seems that the price risks are associated with it, and not with the grain.

– Today grain is getting cheaper, gross harvests are projected at a good level, although 3-4 million tons less than last year. However, this volume will provide for both the domestic needs of the country and export. At the same time, bread producers complain about the growth in production costs. The situation in the grain market is constantly changing: prices rise and fall. Since the beginning of the year, bread, in particular, “Borodinsky”, has risen in price by 20 percent. And if this happened, then it will not go down in price anymore. And here the bakers are somewhat disingenuous. As we remember, at the end of 2020, the state allocated subsidies to them, compensating for part of production costs. It seems that by predicting an imminent rise in prices, they are seeking a repeat of this situation.

“But last year, grain was very actively exported, and it significantly increased in value. Is this moment still translated into the price of bread today?

– Indeed, the price of grain has risen by 40%, flour – by 20%, and bread – by 10%. Bakeries neutralized this trend precisely through subsidies. Now there are no subsidies, and we are witnessing a certain delayed rise in prices. But since the grain is getting cheaper, the next step is, in theory, flour. On the other hand, this factor is outweighed by the rising cost of imported ingredients, growing labor and energy costs. Let me remind you that an impressive amount of electricity is used in the production of bakery products. Bread is a socially significant commodity, it is vital for the absolute majority of the population, demand for mass varieties will not fall. And elite varieties are not cheap anyway, respectively, less in demand.