Pork production will continue to increase in 2021

Oversaturation of the pork market is the main challenge of the next two to three years

In 2021, domestic pork production will increase by 150-170 thousand tons (3-5%) in slaughter weight. Yuri Kovalev, General DIRECTOR of the National Union of Pig Breeders (NSS), spoke about this during the Russian MEAT & Feed Industry conference of Agroinvestor. According to the forecast of the Ministry of Agriculture, pig breeding will grow by 4.2% this year, Gennady Shichkin, Deputy Director of the Department of Animal Husbandry and Breeding of the Agricultural Department, said at the conference.

Previously, the NSS predicted a higher increase - more than 5%, but the adjustment had to be made due to the situation with the spread of African swine fever. At the same time, there is no likelihood of a decrease in production in the short term, and on the contrary, there is a risk of overproduction, Kovalev noted. The glut of the pork market is the main challenge for the next two to three years. Against this background, the price of pork may fall by another 4-5% from the 2020 figures. “However, by the end of 2021, average prices should remain at the level of 2020,” Kovalev added.

Last year, pork production increased by 370,000 tonnes in carcass weight, the largest increase in the last 15 years, Kovalev stressed. Total production was 4.3 million tonnes in carcass weight, a level almost on par with that of Brazil, he compared. Kovalev recalled that today the top 20 Russian pork producers account for almost 70% of all industrial production, the top 50 - 90%.

In early February, analysts at the Center for Economic Forecasting (CEP) of Gazprombank reported that, according to the Brazilian Animal Protein Association (ABPA), pork production in this country amounted to 4.25 million tons, while in RUSSIA it reached 4.28 million tons. According to According to these data, Russia in 2020 entered the top 5 world producers of pork and overtook Brazil.

In the past six years, annual pork consumption has increased by 0.7 million tons against the backdrop of lower prices, Kovalev noted. In 2018, Russia, from the once number one pork importer in the world, reached 100% self-sufficiency in this meat. In 2019, pork exports exceeded imports for the first time - our country became a net exporter. In 2020, Russia entered the top 10 global pork exporters, the HEAD of the NSS said.

In 2020, pork exports almost doubled and exceeded 206,000 tons. “This is a huge figure, it makes up about 5% of the total production, and this is quite a critical indicator, which indicates that we are starting to be heavily dependent on exports” Kovalev said.

The huge increase in meat production in 2020 expectedly affected prices, Kovalev continued. “Our forecast was minus 10% for the year from the average prevailing prices, and this forecast came true in the first half of last year. This was a huge blow to the industry, because all the processes to increase the cost began to emerge, and the price fell, - said Kovalev. - These 10% for the year resulted in losses of about 50 billion rubles. Then there was a "covid surprise", as a result of which the average price for the year was at the level of 2019. There was no plus, but there was also no minus.

The head of the NSS explained the change in the situation by three factors: a decrease in imports, an increase in exports and consumption of pork. The latter indicator increased by almost 4.5% last year due to the impossibility of traveling abroad due to quarantine restrictions, the state’s financial support for doctors, payments for children, and so on also played a role. The increase in consumption was also influenced by warm weather, which persisted for a long time last year. The last factor in the increase in consumption was the decline in pork prices, while the cost of poultry did not fluctuate then.