Date :23 October 2020

The crisis of poultry producers in Russia

Due to rising feed prices in Russia, the country’s poultry industry producers are facing many problems.

Russian poultry unions have not raised the price of their products for fear of a drop in consumer demand and are content with a minimum profit of 7%.

Although officials in the country have allowed a 15 percent increase in the price of these products, manufacturers say such an increase would reduce people’s purchasing power and reduce demand. An issue that could drive many manufacturers off the market.

Some experts believe that with the current trend in Russia, some companies will be forced to stop production and close. An issue that could add to the crisis for the country’s poultry industry.

But the Russian Poultry Breeders’ Union has offered the government a subsidy to feed the poultry and to regulate the grain market.

Estimates suggest that corn prices in Russia have risen by more than 40 percent over the past year.

Experts believe that given the 70 percent share of feed in the poultry meat production structure, this price increase could have an impact of at least 15 percent on the final price.

Under the current crisis, the purchasing power of its citizens seems to be declining, and the growth of Russian poultry exports, although inflowing foreign exchange earnings into the Russian poultry market will not be able to offset rising raw material prices.

It should be noted that unlike many parts of the world where the average profit of poultry production is between 3 and 5 percent, due to government support for the Russian poultry industry to develop this industry over the past 15 years, the profits of this industry for producers are sometimes It has also reached 30%. This issue has been criticized by some economists in the country and they believe that it should be corrected.

Finally, it seems that the short-term solution to the current crisis for the Russian poultry industry is to allocate subsidies to buy grain at a reasonable price for this sector. This is an issue that the government of this country has put on its agenda and they are trying to stabilize this situation by June 2021.

 

Read more:

Brazilian chicken meat producers at a crossroads: reduced production or reduced prices!

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