Pork in Russia is occasionally cheaper than poultry
World of pigs
News Nov 2, 2020
In some Russian regions, wholesale pork prices have dropped to less than those for poultry meat, according to the president of the Russian consulting agency Agrifood Strategies, Albert Davleyev.
Pork on a scales at a market in Russia. - Photo: Dreamstime
Low margins on pig productionThe pig farmers’ profitability dwindles as the prices fall, and this process is continuing. Davleyev said, “As a result, margins of pork producers went down from 30-35% a few years ago to 5-10% and are still declining under the pressure of increasing competition from big vertical integrators which have own land, feed processing, nucleus, grow-out farms, slaughter, processing, storage, and distribution facilities. Some of their production costs are compensated by rapidly increasing exports, which provide good proceeds in hard currency for cheap swine by-products and offal.”
He added, “However, such a process cannot last forever, and soon the further price decrease will inevitably have to stop when business profitability reaches 3-5%. And pork will never be able to compete with poultry meat pricewise, just because of the Feed Conversion Ratio which is 1.7-1.8 in broilers and 2.2.-2.7 in swine.”
Continuous outbreaks of ASF
Davleyev said that amid the price reduction, there is also a drastic reduction of the backyard farming sector, which has been severely hit by continuous outbreaks of African Swine Fever (ASF). On top of that, there are forced restrictions with regard to the swine herd in small and backyard farms by federal and regional veterinary authorities.
Backyard farms historically had the highest production costs in all segments of the Russian pig industry.
Speaking earlier this year, Yuri Kovalev, chairman of the Russian Union of Pork Producers (RUPP), however, claimed that the Covid-19 pandemic could cause a recovery of backyard farming. He said that some Russian regions have begun giving piglets to people free of charge to mitigate the negative impact of Covid-19 and the nationwide lockdown introduced to slow down the spread of the virus on the protein consumption.
From: https://www.pigprogress.net/World-of-Pigs1/Articles/2020/11/Pork-in-Russia-is-occasionally-cheaper-than-poultry-663848E/