World meat industry news

The introduction of duty-free import of 200,000 tons of beef into Russia contributed to a reduction in the price of cattle within the country. Russian farmers cannot compete with suppliers of imported raw materials and stop selling livestock for slaughter. Kommersant writes about this with reference to market participants.

As the publication notes, with the strengthening of the national currency and the introduction of a zero duty (until January 1, 2022, the duty on beef imports was 15%), imported beef became cheaper than Russian beef by an average of 25%, Kommersant reports, citing a source in the industry. It is unprofitable for Russian farmers to sell livestock at such prices, because due to the increase in the cost of feed and other components, the cost of beef production has increased.

According to the publication, a number of farms refuse to sell livestock to meat processors, hoping for a rise in prices. This, in particular, was reported by a source in the Zarechnoye Group of Companies (one of the largest beef producers in the Russian Federation).

The purchase price for cattle meat on the Russian market has been decreasing for the third month in a row. Over the past week, the price has fallen another 15%, the newspaper writes.

Recall that since the beginning of the year, import duties for the supply of 200,000 tons of beef and 100,000 tons of pork have been zeroed. The measure was introduced to stabilize meat prices in the domestic market.

As Veterinary and Life previously reported, the Ministry of Economic Development intends to abolish the duty-free import of meat from July 1 this year. This was announced to ViZh by Yury Kovalev, General Director of the National Union of Pig Breeders.

However, according to industry experts, the return of the duty to the level of 15% will not change the situation on the Russian market: beef imported from abroad will be cheaper than Russian.

According to the estimates of the National Union of Pig Breeders, beef production in Russia from January to June grew less than other types of meat - by 0.1%, to 1.112 million tons.

The head of the National Meat Association, Sergei Yushin, predicts that imports of imported beef to the Russian market will continue beyond the duty-free quota, as the strengthening of the ruble has significantly increased the profitability of imports.

At the same time, Sergei Yushin calls the decrease in the supply of Russian cattle for slaughter in the summer a seasonal factor. The main slaughter takes place at the end of the third quarter and in the fourth quarter, when the cattle reaches the optimal weight. The shortage of local livestock for slaughter will be fixed all summer, the expert predicts.

Roman Kostyuk, General Director of the National Union of Beef Producers, in an interview with Veterinary and Life noted that so far, beef imports to Russia account for no more than 20% of total consumption. About 300 thousand tons of boneless beef are annually supplied from abroad. To meet this demand, it is necessary to triple the investment in the meat production area.