World meat industry news

Pork exports in the first half of 2023 grew by almost 40% compared to the same period a year earlier. “Even taking into account the fact that it increased from a low base, the increase is still very serious,” said Yury Kovalev, General Director of the National Union of Pig Breeders (NSS), at the conference “Progressive Genetics is the Key to Economic Success”, organized by Agroeco.

Deliveries to distant countries are being restored, primarily to Vietnam and Hong Kong, while the achieved level of shipments to Belarus is maintained. According to NSS estimates, according to the results of the first half of the year, the export of Russian pork was distributed approximately 50/50 between the countries of Southeast Asia and the states of the EAEU. “If the momentum of exports continues, then by the end of the year we can reach the figure of 220-230 thousand tons, or $500 million, and this will help unload the market,” Kovalev noted.

Starting in 2020, the main risk of pig farming is a market glut when supply exceeds demand. In such a situation, foreign markets are the most important sales channel, especially given that pork production continues to grow, the head of the union noted. In conditions of oversaturation of the market, the most severe competition usually begins, and wholesale prices go down. “It’s good if during such a period it is possible to achieve a reduction in costs, otherwise the margin of manufacturers falls,” he stressed.

Until 2020, additional production volumes replaced imports, but over the past three years, pork has almost not been imported from abroad, while production continues to grow, Kovalev noted. In agricultural enterprises, according to the results of last year, the increase was 6.9%, taking into account private household plots - 5%, more than 200 thousand tons of pork were added to the self-sufficient market. “At the same time, in the first half of last year, exports fell by 25%, so we had good reason to believe that an additional 50,000 tons of pork would remain on the market, and prices for it could drop by 10-15%,” recalled the head of the NSS . But in the second half of last year, the situation began to normalize, and by the end of 2022, the decrease in shipments to foreign markets was only 10%. “The structure of international buyers has changed - shipments to Vietnam have almost halved, but the EAEU countries and, above all, Belarus have become a lifeline for us,” Kovalev added.

As a result, prices fell only by 5.8% last year. This contributed to the growth of domestic consumption, at the end of the year it increased by almost 6%, or 240 thousand tons. “It was pork that became the most affordable red meat last year, while prices for beef and lamb were growing,” Kovalev noted. In addition, the gap between prices for poultry and pork was narrowing, as a result, part of the demand from poultry shifted towards pork.

This year, pork consumption continues to grow, prices for it in the first half of the year decreased slightly - by 3%, and by the end of the year, they are expected to decrease by 5%. At the same time, the cost of pork has even more approached the price of chicken. “This plays into our hands, because pork consumption is growing,” said the head of the NSS. On the other hand, there are fears: will pig-breeding enterprises withstand such an economy, Kovalev argues.

“In terms of pork consumption last year, we approached 30 kg per person, to be honest, I never thought that this was possible, since the indicator had been at the level of 23-25 kg for several years,” admitted the head NSS. Now the share of pork in total meat consumption is 38%, despite the fact that for 30 years the figure was 32-34%.

At the same time, last year was extremely dramatic in terms of cost dynamics: in the first half of the year, the industry average was at the level of 90-95 rubles/kg, but in the second half of the year the situation normalized, and at the end of the year, the average cost was 80 rubles/kg, which is the level of 2021, compared Kovalev. This year, according to the cautious expectations of NSS, the cost of pork production may drop to 75 rubles/kg due to low feed prices. While many input costs are rising, a good grain harvest is expected and with high stocks built for the outgoing season, low prices can be expected to continue.