World meat industry news

The wholesale price for live pigs in the week from February 6 to February 10, 2023 dropped by 4% to 98 rubles. per kg, according to the price monitoring agency AD Libitum. These are the minimum values since December 2020, when the cost of pigs also fell below 100 rubles. per kg.

The cost of live pork and broiler carcasses in the wholesale sector traditionally decreases after the New Year's Eve growth amid increased demand, AD Libitium explains. According to the agency's forecasts, the trend will change before the holidays on February 23 and March 8. In 2018-2022 price growth also began in late February and early March, according to retrospective monitoring data of the agency.

The National Union of Pig Breeders (NSS) expects average annual wholesale prices to fall by 5-7% in 2023 due to continued growth in production. In early February, Vedomosti, also referring to the NSS forecast, wrote that in 2023 the production of pork in live weight will increase by 8% to 5.7 million tons. In the first month of the year, the average cost of live pigs was 108.08 rubles. per kg, which is 5.3% lower than the level of the same period in 2022, indicates NSS General Director Yury Kovalev.

Sergei Yushin, head of the National Meat Association, explains that the meat market is highly seasonal. He expects that closer to the end of Lent (April 15), when meat processors start to stock up on products before the May holidays and the barbecue season, the situation with the decrease in wholesale prices may change.

But so far, the industry is not expecting a sharp increase in the cost of meat for consumers this year. Yushin points out that, in addition to the growth in pork production, the output of turkey will also increase - by more than 5% - and poultry as a whole by 2%. If there are no epizootic problems, as well as a stable situation in the feed and feed ingredients market, then we should expect average prices to remain at the level of no higher than last year for the main types of meat, the expert predicts. The situation with the price contributes to the growth of consumption, Kovalev believes. In 2022, consumption (production less imports less exports) of pork in Russia increased by 5.9% to 4.3 million tons in carcass weight and reached 30 kg per person.

But now the cost of production of live pork is 75-80 rubles. per kg (excluding VAT), indicates the general director of PKh Lazarevskoe, Christina Romanovskaya. Despite the stable price situation in the grain market, the increase in the cost of premixes and other feed components that affect the weight of animals continues, and logistics costs are also increasing, she adds. So the company cannot sell pork below 110 rubles. per kg, because otherwise it will work at a loss, says Romanovskaya.