World meat industry news

The Ministry of Agriculture will extend the quota for the import of boneless beef with a duty of 0% for 2023. This was reported to Izvestia in the department. This decision was made in response to the request of meat processors. According to experts, the measure will help curb price increases, which could reach 20-30% if the quota was cancelled. Producers also asked to establish a zero duty on imports of up to 100 thousand tons of pork per year, but the Ministry of Agriculture did not support this initiative.

plus year

Tariff benefits with zero import duty on imported beef will be extended to 2023, the Ministry of Agriculture told Izvestia. They specified that such a decision was made at a meeting of the subcommittee on customs-tariff and non-tariff regulation at the Ministry of Economic Development on October 18. Earlier, the National Union of Meat Processors (NSM) asked the Minister of Agriculture of the Russian Federation Dmitry Patrushev to extend the benefits. The zero-duty beef import quota was introduced at the end of 2021, it was supposed to be valid until the end of 2022.

Also, the NSM proposed to establish a quota for duty-free imports of up to 100,000 tons of pork per year. The Ministry of Agriculture said that they are against such a measure - domestic producers completely cover the internal needs of the market for this type of meat. Referring to Rosstat data, the ministry noted: from January to September 2022, the country produced 6.2% more pork than in the same period of 2021. The growth in the production of this type of meat contributes to a decrease in the selling price for such products - since the beginning of the year it has decreased by 5.9%, and compared to the same period last year - by 11%, the ministry said.

According to the Institute for Agricultural Market Studies (IKAR), the volume of beef production in the first nine months of 2022 compared to the same period last year decreased by 4.2%, while pork production increased by 7.9%.

The situation on the pork and beef markets is fundamentally different, said a source in the meat industry for Izvestia. Pork is becoming more due to new projects, this year the growth could be 5%, he said. And there is less domestic beef, as it is most often a by-product of dairy farming, which is becoming more efficient and does not require so many cows. This explains the different reaction of the Ministry of Agriculture: support for the import of beef under a quota and the refusal to introduce this measure in relation to pork, the source of Izvestia believes.

minus volume

According to Yulia Panferova, Chairman of the Board of the National Council of Ministers, the refusal to extend the quotas for beef threatened with a shortage of the product on the market and a rise in prices by 20-30%. The prolongation of benefits will allow keeping the cost of products at a certain level, she believes.

“But some types of pork are now in short supply, which has led to a significant increase in prices. For example, brisket and bacon, which are now the most popular among manufacturers, have risen in price by 40%. To reduce prices, it is necessary to replenish the commodity stocks of pork through the introduction of quotas, Yulia Panferova is sure.

According to IKAR, there is generally enough pork on the Russian market, but they agree that there is an increased demand for brisket and bacon.

— These types of raw materials are quite expensive. At the same time, imports are very small, especially in recent months. There is a need for beef, its import plays a significant role (quotas apply to non-CIS countries). Paraguay accounts for 50% of imports, Brazil - 26%, Colombia - 12%, India - 4.4%. If the supply of imported beef is reduced, this will have a negative impact on the market, because there is not enough of it in Russia,” said Anna Kudryakova, IKAR meat market expert.

Extending beef import quotas is a good decision, but the volume set for 2023 is not enough for the Russian market, Tatyana Larina, CEO of meat processing company Vostryakovo-2, believes.

- It was calculated on the basis of the actually imported volume of this type of meat in 2022, and not planned for this period. For 2022, the import of beef in the amount of 200 thousand tons was set, but in reality it came in half - 100 thousand tons due to failures in logistics, she said.

According to one of the interlocutors of Izvestia in the meat industry, the output of beef is at least not growing, and a number of sausages are produced with this type of meat.

— Beef production is of great social importance. This type of meat is used in the production of school meals, as well as in the recipe for GOST sausages and stews,” Yulia Panferova said.

The change in quota conditions is likely to affect the market, Vitaly Deledivka, co-owner of the Okraina company, fears.

- This year, the cost of beef has already changed several times: at the beginning of the year, the price, for example, for meat on the bone was 296 rubles per kilogram, at the peak of growth in the spring the cost reached 372 rubles, and now it is at the level of 323. Producers have three options for action : reduce the share of beef, raise prices, work without profit. We were forced to raise prices,” he said.

According to the businessman, beef is used in almost all the company's products, so stable prices and the ability to purchase raw materials abroad are important for market participants.