World meat industry news

Meat in Russia is produced more than we can eat. And a further increase in production may even lead to lower prices, says the head of the executive committee of the National Meat Association, Sergei Yushin. Moreover, feed is now inexpensive: due to the huge grain harvest, its prices have decreased. However, not all experts agree with this point of view.

After a decline last year (due to outbreaks of bird flu and African swine fever), this year the production of poultry and pork began to rise again. Because of this, the average wholesale prices for these types of meat in early November were 5-25% lower than the price level a year earlier, says Yushin. For example, a broiler carcass fell in price by 10%, and a chicken fillet - by 15%. According to Yushin, even beef is now in abundance on the market. Compared to the beginning of the year, wholesale prices for the main parts of standard beef decreased by 10-15% on average. If the situation with animal diseases remains stable, in 2023 the production of poultry and pork meat can add another 2-4%, the expert predicts. "Affordable feed prices, stabilization of supplies and prices for key vitamins and amino acids, and the level of provision of the industry with basic vaccines will contribute to this," he explains.

And since poultry and pork account for more than 80% of the meat consumption basket, their cost will inevitably put pressure on beef prices. The decision to extend the duty-free import of beef for the next year will not allow prices to rise: this year it was allowed to import 200 thousand tons, in 2023 - 100 thousand tons. "The decision will ensure a stable price situation on the market and support processors," the Ministry of Agriculture commented earlier.

At the same time, the main factor that affects meat prices is the ratio of supply and demand and the dynamics of disposable incomes of the population, Yushin believes. With supply likely to rise in 2023 and disposable incomes remain under pressure, there is no reason for prices to rise sharply. "This would inevitably lead to a drop in consumption, and then prices," says Yushin. In order to prevent a sharp collapse in meat prices, Russian producers are trying to increase their exports.

Galina Sorokina, Professor of the Department of World Economy and International Economic Relations of the State University of Management, previously expressed a different point of view to the media. In her opinion, meat prices will rise next year due to import dependence in genetic material. But beef will especially rise in price: the needs of the domestic market are covered by about 80% of its own production. Due to sanctions, the import of this type of meat has decreased. At the same time, the permission for duty-free import of beef only created an additional problem. According to Sorokina, the decline in prices with rising costs has led to the disinterest of Russian producers in selling beef on the domestic market and the growth of its exports to eastern countries.

Director General of the National Union of Beef Producers Roman Kostyuk agrees that beef prices "will inevitably rise" if not in 2023, then in 2024. In Russia, there is a decrease in beef production. Formally, this year there may be an increase in the production of this meat by 3-5%, up to 1.67 million tons. But according to the information of the union, this will happen, among other things, due to a reduction in the breeding stock. Too complex and long business under rapidly changing conditions makes raising cattle uninteresting for investors, explains Kostyuk. For this reason, the expert predicts a decrease in production volumes next year.