Russia’s broiler meat production is expected to grow slightly in 2017, by 0.5% to 3.77 million metric tons (MMT, ready-to-cook weight), according to the latest report from the US Department of Agriculture’s Foreign Agricultural Service (FAS).
After two decades of accelerated growth, the industrial production of chicken meat has reached the capacity needed to satisfy domestic demand and is anticipated to slow with stable, low consumer prices for broiler meat.
Low margins motivate those producers who are able to enhance value chains and optimize farm operations. These efforts allow companies from the top-20 list to continue increasing production, which ups their market share and offsets falling production of smaller farms that must close operations due to financial challenges.
If financial markets stabilize, industry-leading companies, especially those who produce their own feed crops, may see some improvement of profitability in 2017, as the expectations for the wheat crop in 2016 are very high.
Considering the extension of the counter-sanction food embargo on western suppliers through 2017 and assuming no dramatic changes in currency exchange rates, specifically in Belarus and Brazil, the report predicts Russian broiler imports may stabilize in 2017 at the 2016 level of 0.22 MMT. The continued restrictions mean imported cuts from Brazil and chilled broilers from Belarus remain in demand.
Exports of broiler meat are anticipated to grow in 2017, as Russian poultry and meat industry and authorities continue to expand trade.
FAS anticipates stable demand for broiler meat in 2017, although broiler meat will face more competition from falling pork prices and growing domestic supplies of turkey, which will limit expansion of the chicken meat share in the market. (ThePoultrySite/Business World Magazine)
