World meat industry news

All news / Russia Hog Market

  • 27 Dec 2016, 10:49

Currently, pig prices are fluctuating between 110 and 115 Roubles per live kg ($1.77 to $1.85). With pig meat consumption increasing in Russia by 6.6 per cent in 2016, pig farming continues to be very profitable in Russia. Currently, there are approximately 300,000 new sow places with finance approved (and some already under construction) and another 200,000 new sow places in final stages of approval, writes Simon Grey – General Manager, Russia, CIS, and Europe.

Genesus attended the recent meeting of Russian Pig Producers. Main points of discussion (other than dealing with African Swine Fever) was development of export markets in China / Asia. With the most recent outbreaks having links to village production, where the majority of people who work on pig farms live, it seems a simple move to make keeping pigs other than on properly registered and controlled farms illegal?

Continuing to develop markets in Russia and for export is a priority for Russian producers. Ultimately, it is getting people to eat more pig meat that drives the business. A couple of weeks ago, Agro-Belogoria launched their 100 per cent Genesus Duroc meat on the market, a by-product from their Genesus Duroc Nucleus. This top-quality pork is targeted at top end restaurants. Currently, demand is out stripping supply, even with the 20 per cent premium on price (over their standard pork). The best way to sell more pig meat is to supply the market with tastier pork. This means just one thing, Duroc sired slaughter pigs.

In 2016, Genesus increased its market share for breeding stock to China to 42 per cent! Clearly Genesus has a pig the market wants!

Developing export markets depends upon many factors, however ultimately in a globally traded commodity market, cost of production is a major one. The competition for export tonnes will come primarily from Canada, USA and Brazil, the 3 countries with the lowest cost of production globally.

Europe’s average cost of production is 38 per cent higher than North America. A lot of this extra cost is on the back of excessive legislation within the EU related to how animals are kept and how slurry is dealt with. This simply adds to costs, and makes European farmers less competitive. The countries with the most extreme legislation, like the UK, where it is illegal to keep sows in crates, other than at farrowing, have the highest cost of production! What a surprise! It is also no surprise that the UK has lost 50 per cent of its production in the past 15 years!

For Russia to develop into a major global supplier of pork it needs to be competitive on cost of production with North America. In many ways, Russia is competitive, but others not. An area of opportunity to reduce cost is reducing the very excessive level of administration and rules that Russian farms have to follow. Pointless rules and bureaucracy do nothing other than add to cost of production and increase corruption.

Excessive red tape is everywhere on Russian farms and is an area that Russian Pig Producers wish to address. Just one example was discussed at the recent Pig Producers conference, where one company described the time and money spent, dealing with rules for storage and disposal of slurry!

The majority of rules come from Soviet times when slurry was considered a dangerous toxic waste. Today we know pig slurry is a very valuable organic fertilizer that can replace chemical fertilizers for crop production. When put onto growing crops it is well utilized and will increase yields. If properly handled the fertilizer value is many times more than the cost of spreading. In-fact, in some parts of the world, contract farmers keep pigs as much for the fertilizer value of the slurry, as from what they can earn from keeping pigs!

In Russia, rules state slurry must be stored 60m from pig buildings (despite the fact it comes from tanks that sit directly below pigs, often 10 cm to 20 cm from the pigs). It then needs to be quarantined for 2 weeks and tested to prove it is not toxic (again it has been removed from buildings where pigs live and people work)! Once proven safe it then can be moved to lagoons where it must be stored for 6 months (when it loses a good part of its fertilizer value when Ammonia is released to the air). Finally, before spreading it must again be tested to prove it is safe. All in all, there are about 20 codes and regulations that must be complied to.

The common-sense approach is for slurry to be stored in lagoons that do not leak (to protect ground water) and that it is spread as soon as is practically possible onto growing crops. If spreading is done close to people, use methods that limit inconvenience due to smell (injection or dribble bars). It is in the farmer’s interest to analyse to understand the fertilizer value for maximising crop yields, and profitability!

Historically, many Russian farms were built near to people (workforce) and in places with no agricultural land for slurry to be spread on (as it was a toxic waste). Modern Russian pig farms are built sensibly, in the middle of farmland, where using slurry as an organic fertilizer is easy. Perhaps rules should be changed to reflect modern knowledge and practices?

With global population expected to raise by 1/3 between 2009 and 2050 we clearly need a lot more food. Estimates are that we will need another 200 million tonnes of meat annually by 2050. The majority of population growth is predicted to be in developing countries. This means the extra population will want food it can afford to eat!

It seems some common sense is required in our approach to feeding the world in the future. Commercial companies like Genesus invest a lot of money in making pork production more efficient and lower cost. The annual year on year Genetic Improvement achieved by Genesus is worth 250 Roubles ($4) per slaughter pig per year (every year).

In some countries, bureaucrats create more and more new rules that do the exact opposite. It makes me laugh to see headlines on Pig News Web Sites, saying scientists in Europe have discovered that piglets reared in loose farrowing are more likely to die and will have lower weaning weights than those reared in conventional farrowing crates! What do they expect? The farrowing crate was developed by farmers for a reason, to increase efficiency and reduce cost, to be able to feed a growing population with food they can afford.

If a minority of wealthy people wish to pay more for their food to be reared in more traditional ways that they believe is better for the animal, then fine, let them. They pay more for their houses, cars, holidays etc. and markets exist to supply their needs. What we should not do is deny others good nutrition at a price they can afford! Anything that unnecessarily increases cost of production for pig meat does this!