Russia per capita consumption at 20kg per person is half of Europe's and a price drop could close old farms with low productivity.
Import controls on pork imposed by Moscow have revived the swine industry in Russia but they could also represent a trap considering that the consumption is low and a price drop may put out of the business a great number of old, low productivity farms, according to the latest Genesus Inc global report on the industry.
"An 85 rubbles/kg liveweight (66¢/lb US liveweight) is leading to profits in the $35-50 per head range. Some expansion is underway, and Russia with abundant land and grain production costs should be globally competitive. If Russia prices ever drop to below breakeven, we expect many old, low productivity farms will go out of business", thinks Jim Long, President and CEO of Genesus.
Average pork consumption among the Russians is about 20 kg a year, half the amount consumed in Europe. "We believe if pork becomes cheaper and or Russian consumers have more money – Russia per capita consumption could increase significantly. Russia has 145 million people, an increase per capita consumption would mean the need for ever more pork production", said the President of Genesus Inc.