Russian Meat Sector:
Time of opportunities or
Time of uncertainty?
Sergey Yushin
National Meat Association
UECBV AGM and the YEMCo Autumn Conference 2014
26 September 2014, Barcelona
Meat Consumption per Сapita in 2000-2013 (kg/year)
+ 84%
80
70
60
50
51,6 kg
40,6 kg
40
30
74,7 kg
30.4
pork
18.7
12.9
14.8
26.7
20
12
10
14.7
17
16.3
0
1
1.1
1.3
2000
Source: NSS
2005
poultry
beef
mutton
2013
2
Meat Consumption Structure in Russia in 2013, %
41%
23%
beef
pork
poultry
36%
Source: NMA
3
180
160
140
Number of New Farms Built in 2008-2013
162
304
Pig farms
162
120
271
Beef farms
100
167
85
80
60
131
Poultry
57
80
79
64 61
61
60
52
25 26
20
0
2008
75
40
37
40
67
131
2009
2010
Source: Ministry of Agriculture of the Russian Federation
2011
2012
17
6
2013
4
2,500
2,000
1,500
Meat and Poultry Production January-June 2013-2014
(thousand tonnes, slaughter weight)
January –June 2014 г. /
January – June 2013 г., %
beef
-2,5%
pork
+7,7%
poultry
+5,2%
1,834
1,929
1,404
1,304
1,000
637
621
500
0
beef
January-June 2013
Source: Russian Federal State Statistics Service
pork
January-June 2014
poultry
5
Industrial Meat and Poultry Production in Russia
January-July 2013-2014
(thousand tonnes, slaughter weight)
2,500
2,000
1,500
January –July 2014 г. /
January – July 2013 г., %
beef
-2,0%
pork
+13,1%
poultry
+5,8%
1,998
1,147
2,114
1,297
1,000
500
298
292
0
beef
January-July 2013
Source: Russian Federal State Statistics Service
pork
January-July 2014
poultry
6
TOP-20 Pork Producers in Russia in 2013 (thousand
tonnes, live weight)
Miratorg
Cherkizovo
Agro-belogorje
Rusagro
The share of these 20 producers amounted to 54,2% of the overall industrial pork
production in Russia in 2013
7
Structure of Meat and Poultry Production
by category of producers, %
100%
75%
41%
63%
62%
61%
50%
25%
5%
32%
6%
32%
35%
2%
3%
62%
56%
28%
2%
10%
1%
89%
9%
1%
90%
9%
1%
90%
70%
small farms
6%
32%
Source: Russian Federal State Statistics Service
2013
2012
2011
2013
2012
2011
2013
2012
0%
2011
backyards
industrial
production
8
9
To Invest or Not To Invest
(Pros and Contras)
•
•
•
•
•
•
•
•
High meat and poultry prices
High margins
Good harvest 105 mln t
Comfortable feed prices
Declining production in the back-yards
and more space on the market
Meat production – state priority
Growing competence
Better understanding of consumer
needs
•
•
•
•
•
•
•
•
•
Slow economy growth
Possibly decreasing disposable incomes
Shortage of bank loans and growing
interest rates
ASF and other diseases
Unpredictable import volumes
Exchange rates
State budget deficit?
Shortage of qualified top-managers for
fig agricultural production
Further liberalization of trade (FTA, CU,
CIS etc.)
5000
4500
4000
3500
Forecast for Meat Production in Russia 2014-2020
(thousand tonnes)
Production at new farms:
Pork +1300 tt
Poultry +900 tt
Beef +280 tt
3000
1500
4000
3700
3000
1600
1900
1000
500
4550
+19%
2500
2000
+23%
+14%
2014
2020
2014
2020
2014
2020
0
beef
pork
Source: Ministry of Agriculture of the Russian Federation, NMA, NSS,
RPU
poultry
11
What Affects Import of Meat in 2014
• Animal diseases (ASF-related ban from EU)
• Feed additives and hormones (USA, Australia, Canada)
• Strict veterinary requirements of the Customs Union –
not enough establishments approved
• High export prices for the Russian market
• Exchange rates
• Monopoly of some exporting countries
• Growing demand on internal and international markets
• Decree on Protection Measures of August 6th 2014
About 40 thousand tonnes of meat
and meat products from USA, EU,
Norway and Canada worth 140
million dollars
were in transit (road/sea) when the
Government’s list of products
under the ban was published
2000
1500
1000
Import of Meat to Russia January-June 2013-2014
(CIS, offals, fat included, thousand tonnes)
African Swine Fever in EU
Ractopamine
in USA and Belarus)
Canada
Imported
pork (including
High
export
pricesshare
for Russia
and
pork
products
in pork
USD/Ruble
exchange
rate30%
consumption
exceeds
Slower economy
Stagnation of consumption and change
of consumption trends
500
0
470
375
295
01-06.2013 01–06.2014
Source: NMA
beef
192
01-06.2013
01–06.2014
pork
239
184
01-06.2013 01–06.2014
poultry
14
2000
1500
Import of Meat to Russia January-August 2013-2014
(CIS, offals, fat not included, thousand tonnes)
01-08.2014/01-08.2013,%
Beef
Pork
Poultry
-9,0%
-35,3%
-16,4%
1000
500
0
345
314
01-08.2013 01–08.2014
Source: NMA
beef
380
01-08.2013
246
275
230
01–08.2014
01-08.2013
01–08.2014
pork
poultry
15
Meat Import Share in
Consumption in Russia in
2013,%
Meat Import Share in
Consumption in Russia in
2014*,%
8%
13%
34%
beef
pork
26%
* National Meat Association’s forecast
poultry
beef
10%
30%
pork
poultry
16
Structure of Chilled Beef Import to Russia
01.2014 -06.2014, %
CIS
countries
23,6%
EU
39,0%
Brazil
23,1%
Uruguay
5,2%
Paraguay
1,2%
Source: NMA
Australia
4,5%
New
Zealand
2,0%
Argentina
1,4%
17
Structure of Frozen Beef Import to Russia
01.2014 -06.2014, %
Brazil
60,6%
EU
5,5%
Argentina
1,7%
Australia
0,8%
Source: NMA
CIS
countries
1,7%
Paraguay
26,5%
Nicaragua
0,1%
New
Zealand
0,2%
Uruguay
2,9%
18
Structure of Pork Import to Russia
January-June 2014, %
EU
8,6%
Brazil
39,9%
Canada
41,1%
Serbia
2,0%
CIS countries Chile
0,4%
3,4%
Source: NMA
USA
4,2%
Paraguay
0,3%
19
Structure of Pork Fat Import to Russia
01.2014-06.2014, %
Ireland
1%
Germany
10%
Denmark
11%
Italy
Netherlands
9% 11%
France
11%
Belgium
5%
Hungary
4%
Austria
Serbia Chile USA
3%
2% 2% 1%
Source: NMA
Poland
5%
Canada
23%
20
Structure of Pork Offals Import to Russia
Ireland 01.2014-06.2014,%
Germany
8%
Hungary
4%
3%
Denmark Italy
11%
11%
Netherlands
21%
Belgium
8%
Austria
7%
Serbia Switzerland Chile USA
2%
0,3%
3%
3%
Source: NMA
Poland
2%
Portugal
2%
Finland
Paraguay Canada Sweden
1%
7%
1%
2%
France
5%
21
Argentina
1,3%
Structure of Poultry Import to Russia
Brazil 01.2014-06.2014, %
4,8%
EU
15,9%
CIS
countries
2,5%
Source: NMA
USA
74,9%
Turkey
0,5%
22
Resources of Beef, Pork and Poultry in 2013-2014*
(thousand tonnes)
2013
2014
2014* to 2013,%
beef
2 460
2 307
-6%
pork
3 815
3 325
-13%
poultry
4 325
4 324
unchanged
TOTAL:
10 600
9 955
-6%
*National Meat Association’ forecast
23
Wholesale Prices for Live Pigs and Pork in Russia, rubles/kg
New ban on import
Pork carcasses
EU ASF-related ban
Slaughter pigs
Source: NMA
24
Wholesale Prices for Poultry Cuts in Russia, rubles/kg
New ban on import
Boneless breast
EU ASF-related ban
whole breast
whole chicken
Source: NMA
25
Wholesale Prices for Beef in Russia, rubles/kg
New ban on import
butt
trimming 80%
Source: NMA
26
Export Prices for Beef CIF Sankt-Petersburg, USD
Source: NMA
27
Export Prices for Brazilian Pork CIF Sankt-Petersburg, USD
Source: NMA
28
Impact and Consequences of Decreased Import
•
•
•
•
•
•
•
•
Government attention to price hikes
Looking for new suppliers
Belarus benefits from the ban
Meat processing – growing losses
Reemerging of illegal trade
Retail vs Processing – who gets meat?
Consumption changes
Consumer concerns
29
Rosselhoznadzor is holding negotiations
on the subject of meat imports from:
pork
Poultry,milk products
beef
beef
Source: Rosselhoznadzor
30
African Swine Fever in Russia in 2014*
Number of outbreaks in 2014:
Among wild boars 86
Among domestic pigs 32
among them in industrial holdings 3
Number of animals slaughtered>200 000
*- according to informarion from Rossselhoznadzor 20.08.2014
Source: Rosselhoznadzor
31
32
Conclusions
•
•
•
•
•
•
Good market for Russian producers
Government will stimulate more investments, increase support
Investors are ready to invest even if and after the ban is lifted
WTO ASF dispute – unclear outcome
Importers loose market and money, some want to invest in production
Processing plants want to invest/build/buy to ensure their own raw
material supply
• New suppliers (China, India? Thailand, Turkey, Mongolia?) will benefit
form the ban
• Trade has become victim to political ambitions and lack of dialogue
between business and politicians
• Russia will continue its pace to self-sufficiency
THANK YOU
Sergey Yushin
National Meat Association
natmeat@yandex.ru
+ 7 495 912-01-55
34