Russian meat production benefits from export growth

Poultry exports from Russia this year are expected to reach US$975m in value, which would be five times higher than in 2018, the Ministry said.

Russia exported 187,900 tonnes (t) of poultry and 83,800t of pork last year, 13% and 12% up on the previous year, respectively, the Russian Federal Customs Service estimated. The country also exported 4,350t of beef in 2018, two times higher than in the previous year, it added.

Although, the Ministry has not provided any estimates on pork exports in 2019, earlier forecasts have suggested that Russia could increase pork production to 270,000t by 2024.

The overall value of Russian meat exports reached US$416m in 2018, a rise of 28% on 2017, according to Russian consultancy ICAR. In total, Russia exported meat products to 57 countries last year.

This year, Russia is expected to increase domestic poultry production by 0.7%, pork production by 4% and beef production by 1% compared to 2018, the Ministry said.

“This positive production dynamic in the main livestock segments is due to the effective state support mechanisms used in the industry,”​ the Ministry stressed.

Problems on the domestic market​

It is believed Russian meat producers need to develop export markets, as the domestic market is close to saturation.

Despite an increase in exports, large-scale poultry production in Russia shrank by 0.3% in January 2019, due to a fall in domestic prices for poultry meat and some poultry farms entering bankruptcy.

Albert Davleyev, president of Russian consultancy Agrifood Strategies, previously told GlobalMeatNews​ that 2019 could be the first year in more than two decades that a reduction in poultry production instead of growth would be recorded.

Russia has been experiencing a constant decline in domestic prices for poultry meat in the past few years, Galina Bobyleva, general director of the Russian Union of Poultry Producers, Rosptitsesoyuz, told local newspaper Agroinvestor​. Prices are at the low level seen in 2016 and, for this reason, most companies have decided not to increase poultry production. Nevertheless, production growth should resume in the next few months, as poultry exports gradually increase, Bobyleva forecast.

The Russian Union of Pork Producers expects domestic pork production to grow by 4-5% in 2019. Some pig farms currently under construction are slated to begin commercial operation in the course of the year. Also, prices for pork on the domestic pork market are continuing to fall.