Russian poultry production sees downturn

By Vladislav Vorotnikov

- Last updated on GMT

Russian poultry production sees downturn

Related tags Poultry Livestock

Russian farmers produced 1.15 million tonnes (t) of poultry meat in the first quarter of 2019, 6.2% down on the same period of the previous year.

An oversaturated domestic market and a series of bankruptcies in the segment contributed to the decline.

Poultry production in Russia had been in growth for nearly two decades consecutively, driven primarily by state aid and import replacements, but there appeared to be no room for further development, according to the Russian Union of Poultry Farmers, Rosptitsesoyuz. As of early 2019, Russia was manufacturing 33.7kg of poultry per capita, the fourth-highest rate in the world, said Elena Stepanova, deputy director of Rosptitsesoyuz, speaking at the Russian Meat and Feed Industry conference in Moscow.

The world’s average rate is 16.2kg per capita, and current production in Russia was already equal to domestic demand, Stepanova said.

“In 2019, we forecast some increase in production, but this growth will be attributed primarily to exports. We consider the balance on the domestic poultry market as fully built,”​ Stepanova said, adding that overall poultry production in Russia in 2019 was expected to grow by 2.7% compared to the previous year, to 5.11 million tonnes (t).

Rosptitsesoyuz appeared to be bullish about the future of Russia’s poultry industry, anticipating growth to reach 5.55 million t by 2024. However, domestic demand in the next few years was expected to remain unchanged, at somewhere around 5.14 million t, so any additional volume would be for exports, Stepanova said. In 2019, poultry exports are forecast to grow by 70% compared to 2018, to 310,000t.

Regional difficulties

Recent data published by the Russian State Statistical Service, Rosstat, has shown that poultry production in Russia has been falling not only in the Russian south, the region where several major bankruptcies took place over the past year, but also in the Central federal district, where Russia’s biggest poultry holdings are located.

Earlier, Sergey Yushin, chairman of the Russian National Meat Association, said that growth in the poultry industry was about to come to a halt, given domestic oversaturation in broiler meat.

Yushin said a growing number of small and medium poultry producers were operating with zero profitability or had even become loss-making in the past few years.

“Pricing conditions on the market have been getting increasingly poor for Russian poultry companies since 2014. During this period poultry prices have remained unchanged, while production costs have been gradually increasing”,​ Stepanova admitted.

A source in the Russian poultry industry, who wished to not be named, told GlobalMeatNews​ that, since 2017, poultry farms in Russia had been going bankrupt and this trend was expected to continue. He explained that this was counterbalanced to some extent by production growth in the biggest agricultural holdings – those with full-cycle production and numerous different tools at their disposal to adjust costs.

Related topics Meat

Related news

Show more

Follow us


View more