• IKAR in Mass Media

 

 → IKAR in Mass Media → #1086

IKAR in Mass Media

Russia's beef market shaken by trade hit

11 декабря 2015 года

That's according to several reports from meat analysis agencies in the country.

Official information, as of October 2015, indicated the number of cattle on Russian farms totalled 19.8 million head, which is -1.9% lower than on the same date in 2014.

Overall beef production from January to November 2015 amounted to 971,900 tonnes (t) deadweight or 1.705 million tonnes in liveweight, which is also down -1.3% year-on-year.

Negative industry situation

According to Russian experts, beef production in Russia has fallen for several consecutive years, as profitability in the business is lower than in other sectors of agriculture, while payback periods are too long.

“The structure of the meat market in the country is unfavourable for beef producers, as the current system for cattle-breeding remains inefficient. So, despite there being a large area of agricultural land [for pastures], the number of cattle destined for slaughter continues to decline steadily,” stated a report from analytical agency Emeat.

“In the beef sector, the payback period is 10 to 12 years – even under the most effective management. And you only start to move into profit after seven to nine years from the start of a business. The important problem is that not all banks in the country can provide such long-term loans, so we have [state] support for the industry, but we still face a lack of investment,” said head of the National Meat Union Sergei Yushin.

The same opinion is expressed by Daniel Khotko, an expert from Russia’s Institute for Agricultural Market Studies, IKAR, who forecast that beef production this year would decrease by about -1%. According to Khotko, the decline in output from small and medium-sized farms is partly compensated by the growth in beef production from larger businesses.

Imports hurt

Estimated forecasts for this year show that the volume of overall meat consumption in Russia could drop by -5%, with a possible rise in consumption of chicken. Meanwhile, many Russian consumers have switched from eating beef, as domestic products are more expensive than the beef previously imported from Europe.

A report from analytical agency NataliStat noted: “The volume of beef production in Russia in 2015 decreased by -2%, and, this year, the structure of the consumer basket in Russia has changed, with consumers shunning beef in favour of cheaper poultry. In addition, the decrease in demand caused retail prices to rise.”

According to official data from Russia’s Agriculture Ministry, in the first half of 2015, the volume of beef imports into the country dropped by 1.5 times to 110,800 tonnes. As a result, prices in some retail chains have jumped by more than 30% since the beginning of the year.

Various forecasts suggest that the consumption of beef this year may drop faster than the reduction in the size of the overall market – by 6-7% – which will continue to hit the going into next year.

Source: GlobalMeatNews.com  |  #meat   |  Comments: 0   Views: 108

There are no comments yet. Be the first!

Only authorized users can comment.