Mykola Babenko, executive director, the Meat Industry Association, claims Ukrainian meat processors are concerned about major negative factors regarding meat supply: overspenditures in pig farming leading to high prices for produced pigs, even comparing to imported meats; massive closures of over 2,000 pig farms over the past six years; the reduction of number of pigs and the shortage of local pigs for meat processing needs partly covered by pork imports from the EU and Canada.
New Pig Production-2025
All this has led to unaffordable to the majority of the population retail prices for meat products.
"We have decided not to wait for the hundreds more of pig farms closures and are initiating a 5-year Program to support the development of pig farming in Ukraine — New Pig Production-2025,” he said.
“Its aim is to stimulate the breeding of pigs for the needs of the meat industry of Ukraine up to 20 million heads at a time and more. This is the number of pigs Ukraine has had in 1991, so it’s not an abstract goal.”
As of January 1, 2020, the total number of pigs in 24 regions of Ukrain hit another low of 5.7 million heads. Of these, 3.3 million are raised within industrial pig farming. For comparison, some countries and territories comparable in size to one region of Ukraine keep more pigs: Denmark — 12 million; Belgium — 6.1 million; Belgorod region of Russia that borders Ukraine — 4 million pigs.
At the same time, the consumption of pork per capita per year is 45 kilos in the EU, 40 in China, 38 in Belarus, 30 in Russia, and 15 in Ukraine, while pork is a country’s traditional product. Currently the capacities of the Ukrainian meat processing companies are less than half loaded.
According to Babenko, domestic pork consumption has the potential to at least double in volumes. Meat should become affordable and available to the Ukrainian consumers. In addition, there is a global shortage of pork, which is yet to be covered, that adds another 10 million tons. These numbers surpass the current pork production in Ukraine by 16 times.
Pork deficit
According to global market forecasts, the pork deficit will remain as a market factor for the next 5—10 years.
Pig prices in the European Union had increased in 2019 by 48% and remain favorable for exporters regardless of pandemic disruptions in logistics and consumption.
This brings good profits to pig farmers and meat processors in the EU. Yet, due to the high density of livestock in the EU combined with ecological restrictions and adoption of Farm to Fork Strategy, that promotes the expansion of organic farms, pig producers in the EU don't have much room to boost the supply. Instead hundreds of farms in Netherlands alone are currently receiving government aid to shut the production in dense areas to reduce environmental impact.
Such factors won't be relevant in Ukraine any time soon due to availability of vast farmlands, and of thousands of abandoned farms that were shut because of multiple reasons, but mainly because of the failure to adapt modern efficient production technologies by previous owners.
"Our goal is to help solve the problem of global pork shortage and make Ukraine one of the leading competitors in the meat market. Ukrainian chicken has already achieved global success, now it’s pork’s time,” added Babenko.
“In partnership with the Center for Improvement of Animal Breeding, with the financial support of the Meat Industry Association participants, we are ready to support the expansion and modernization of existing pig farms, along with guidance for the new investors — Ukrainian and foreign farmers who have interest in pig farming projects with the return on investment rate of about 100% per year.
“We guarantee sustainable profits, sales, legal protection and comprehensive investment support,"