Pig producers expect growth in demand for their products

Pig farmers expect demand for their products to grow. One of the reasons is the reduction in the difference in the wholesale cost of pork (half-carcass) and poultry MEAT (broiler carcass) - this coefficient has recently reached 1.25. Over the past one and a half to two years, the price difference between poultry and pork has decreased, and is now at a record low, said Yury Kovalev, general DIRECTOR of the National Union of Pig Breeders (NSS). This happened for the first time in 15 years.

“This situation is really boosting the demand for pork, shifting it away from poultry. We observed a similar trend in the first half of 2021, when poultry prices rose sharply due to a failure in production, demand shifted towards pork, but then there was no additional supply of pork on the market due to epizootic problems, respectively, pork prices also grew ', he recalls.

Now there is an accelerated growth in pork production - in the industrial sector over the past four months, according to the NSS, it has exceeded 6%. In May, according to the union, this trend continued. “If we add some decrease in exports to this indicator, then the supply on the Russian market has grown by about 7-8%,” Kovalev estimates. - All this leads to the fact that the wholesale prices for pork are now under very strong pressure. And although the average cost of pork in wholesale for five months of this year is at the level of last year, at the beginning of June, prices are much lower than in the same period of 2021,” he emphasizes.

What will be the dynamics of prices for pork in the coming months depends on whether there will be additional demand. On the one hand, there is a drop in the income of the population, on the other hand, the industry is counting on programs announced by the state to support the low-income segments of the population - payments to families with children from May, for which almost half a trillion rubles (465 billion rubles) are included in the country's budget until the end of the year, argues HEAD of the NSS. Also, starting from June, indexation of 10% of public sector salaries and pensions is envisaged. In general, over the next six to seven months, about a trillion rubles will be additionally directed to payments to one of the poorest segments of the population. In addition, traditionally, the demand for pork can be supported by good weather during the barbecue season.

“We hope that the above factors will support demand, and the average pork price at the end of the year will at least not fall relative to 2021. This is especially important in the context of rising production costs: over the past and the year before last, it increased by 30%, - compared Kovalev. — This year we expect it to increase by at least another 10-15%. Livestock farmers' margins are shrinking, which is adding to the tension in the industry."

Earlier, Kommersant reported a decline in sales of broiler meat: according to NielsenIQ, in April they fell by 2.6% yoy. Among the reasons is the transition of large consumers, in particular processors, to cheaper pork. At the same time, the production of poultry meat, as well as pork, is actively increasing: in January-April, 2.13 million tons of chicken were produced, which is 8.1% more than in the same period last year.