Pork and poultry prices may fall by autumn

Will affect the recovery of production rates

The cost of pork and poultry MEAT may decrease due to the restoration of production rates. This was announced by the HEAD of the National Meat Association (NMA) Sergey Yushin on the air of the RBC TV channel. According to him, thanks to the restoration of production volumes, prices for these types of meat are stabilizing, and in the future, growth rates may even lead to a decrease in cost. Yushin added that price cuts are expected by autumn.

According to the expert, in conditions when the volumes of poultry meat production are restored, the supply will gradually grow. EXPORT is difficult now, because in CHINA the prices for poultry meat have seriously decreased and it is almost impossible to supply cuts there, Yushin noted. The subsidizing of transport costs is also terminated due to the exhaustion of the allocated limits, which reduces the competitiveness of domestic products.

“We have hope that pork production will grow by 4% this year. Accordingly, there should be an increase in supply in the market. As a result, we do not rule out that wholesale prices for poultry and pork, as the main types of animal protein consumed, may decrease in autumn,” commented the head of the NMA. He called the preservation of a favorable epizootic situation an important condition. Ensuring veterinary well-being, according to Yushin, is currently one of the main tasks of the government and market participants. “In the event of a decrease in wholesale prices, retail should also react,” he added.

DIRECTOR General of the National Union of Pig Breeders (NSS) Yuri Kovalev said that one of the highest price seasons is now observed, in addition, the market is affected by relatively low production growth in the first quarter due to the spread of African swine fever in late 2020 - early 2021 of the year. “Now there is a gradual recovery. If in the first quarter production increased by 1-2%, now it is 4-5%, in the third quarter the figures will grow again, Kovalev predicts. “In autumn there is always a decrease in demand, but we will have an increase in supply, so wholesale prices will at least be stabilized.”

Of course, the restoration of meat production in the country will put pressure on prices, said Sergei Lakhtyukhov, director general of the National Union of Poultry Breeders. However, according to him, it must be borne in mind that the current price levels do not fully take into account the increase in the cost of raw materials, primarily grain, soybeans, oil, which has been observed since last summer. “Now we see a correction in world prices for the main types of raw materials: wheat and soybeans. But even taking into account this correction, the prices for the main ingredients are significantly higher than a year ago,” the expert said. “Therefore, the further development of the price environment will depend not only on the current rate of increase in meat production, but also on the dynamics of prices for raw materials for the production of feed, the ratio of exchange rates, and the growth rate of household incomes.”

The most significant negative impact is exerted by the increase in prices on almost all components of the cost of production, continues Lakhtyukhov. “In addition, we are now trying to assess how the tightening of environmental requirements will affect the industry: improving the institution of extended producer responsibility, the newly adopted law “On limiting greenhouse gas emissions,” and so on,” he explained. - All this will lead to significant additional costs for manufacturers. In addition, the decline in real disposable incomes of the population, which has reduced effective demand, causes significant concern.”

Undoubtedly, the measures taken by the state in terms of stabilizing domestic prices for grains and oilseeds helped to prevent a significant acceleration in meat prices, continues Lakhtyukhov. At the same time, according to the expert, targeted assistance to socially vulnerable segments of the population could become an important and effective measure. The introduction of such assistance would help increase the economic availability of animal protein sources for those who need it and would increase the total effective demand, he believes.

And this fact will be taken into account when preparing the monthly analytical report Meatinfo.ru      

In early July, citing a study by the marketing agency ROIF Expert, he wrote that in 2021 the Russian turkey meat market shows a positive trend: key producers are increasing production and exports. President of Agrifood Strategies Albert Davleev then said that preliminary forecasts for the increase in turkey production were being met. According to him, in 2021 it is planned to reach the figure of 400 thousand tons due to the launch of new capacities. By the end of the year, the increase in production compared to the previous year may amount to 60 thousand tons - about 15-20”. According to Davleev, turkey prices are now stable.