According to Arthur Rozga, head of the Association of Pig Producers, despite strong growth figures during recent years, Ukraine’s pig industry still has very low levels of efficiency.
“The biggest challenge for pig producers is the high cost of growing pigs, which stands at €1.40-€1.60/kg of live weight in Ukraine compared to an average of €1-€1.10/kg of live weight in Europe. This 40-60% difference means two-thirds of industrial pig farms will lose their market position in the near future,” said Rozga.
“So far, a record harvest [of feed crops] from last year is helping them to stay afloat. For the first time in a number of years, drastically reduced grain prices mean prices for animal feed are not rising. But it is difficult to say how long this delicate balance will last,” he added.
Other marketing experts agree that, after a long period of stagnation, the Ukraine pork production industry will face serious problems this year. According to Nicholas Babenko, director general for the Center for Increasing Efficiency in Livestock, the current problems could affect up to 90% of the country’s pig farms.
“In fact, only 10% of all pig farms in Ukraine are really profitable. The rest seek to increase production capacity, but ignore new production and feeding technology – and automatically lose money,” said Babenko.
Also, analysts predict that, by the end of the year, the ban on private slaughtering of pigs on farms, as well as private sales of pork, will contribute to the forecast collapse in pork prices. They reckon that a large number of farmers will begin slaughtering pigs before the ban comes into force and will flood the market with pork, which in turn will put serious pressure on prices.
In addition, according to Yuri Aknevskyy, CEO of major pork producer JSC ‘Bahmutskiy Agrarian Union’, the high level of pork imports, which sell in Ukraine at low prices, prevents the development of large and medium-sized domestic pig farms.
According to Aknevskyy, imported meat importers are selling pork 30-40% cheaper than domestic producers, and as a result, almost all meat processing plants are willing to purchase foreign pork to produce semi-finished products and sausages.
“To stop the price decline in the domestic market, we need to implement a quota system for foreign pork,” he said. “Manufacturers have calculated that, in order to stabilise the price of pork, the import quota for this meat should be no more than 15% of domestic production or approximately 120,000t per year.”