Broiler meat continues to rise in price Business RusLetter

The cost of a broiler carcass in the wholesale segment continues to grow, despite the end of the May holidays. This is evidenced by the data of price monitoring agency AD Libitum. In the week to May 21, the carcass rose by 1% to 160 rubles. per kg, up 17% compared to the same price last year. By 3% up to 265 rubles. per kg for the week, the price of chicken fillet, as well as the wing, increased by 3% to 180 rubles. per kg.

The agency’s analysts write that “the process is not seasonal, so at the moment it is difficult to predict the moment of stabilization.” In previous years, broiler carcasses have fallen in price just after peak demand before and during the May holidays.

Now broiler carcasses are even more expensive than comparable positions in the related pork market. Half-carcasses of this type of meat fell in price by 1% over the week to 154 rubles. per kg, ham – by 1% to 230 rubles. per kg, shoulder blade – by 1% to 223 rubles. per kg.

The main explanation for the situation is the growth of export supplies, says Andrei Sokolov, senior partner at AD Libitum. According to him, the depreciation of the ruble makes Russian products more attractive on the foreign market. From December 31, 2022 to May 19, 2023, the dollar rose in price from 70.3 to 80 rubles.

An increase in shipments to foreign markets can be observed every month since the beginning of this year. The IMIT Agency provides information that in January 2023, poultry exports to non-CIS countries amounted to 16,500 tons, in February – 18,700 tons (against 17,100 tons and 20,400 tons, respectively, in 2022). In March, export figures exceeded the level of the previous year, according to the monitoring of the National Union of Poultry Breeders – 24,479 tons against 22,825 a year earlier. Large export-oriented companies, by shipping part of their products for export, keep domestic prices from falling, as they reduce supply on the Russian market, Sokolov concludes.

The largest exporters of poultry products in Russia are GAP Resurs and Cherkizovo, according to IMIT data for 2022. They accounted for 62% of all Russian exports. The GAP “Resource” declined to comment. A representative of Cherkizovo said that exports have a greater impact on the cost of breast and wing fillets than carcasses. According to him, in the first quarter, the group increased external shipments by 15% at the expense of China and Vietnam, as well as the post-Soviet countries.

The head of the National Meat Association, Sergei Yushin, points out that the situation when broiler carcasses are currently more expensive than pork is explained by the rapid growth in pork production in agricultural organizations, Yushin is sure. According to Rosstat, for 4 months of 2023, the release in live weight of pigs increased by 6.3% to 1.7 million tons, while poultry – by 2.4% to 2.1 million tons. Additional volumes in the closed markets of China and Japan is putting pressure on domestic prices for this type of meat, Yushin explains.

In addition, he continues, a broiler carcass, unlike half carcasses, is a popular commodity in retail and is a traffic-generating one. So the chains often sell it at a minimal margin and sometimes even at a price below the purchase price, which maintains high demand for it and periodically pushes prices up, Yushin explains. Another possible reason for the unusual price situation is problems with spare parts for broiler slaughter and deboning equipment and rising costs as a result of sanctions and the exit of a number of companies, Sokolov adds. At the end of April, Vedomosti reported that Rosptitsesoyuz feared problems with poultry processing for the reasons indicated. In particular, the Dutch company Meyn has already stopped deliveries and service.

The situation may return to normal after meat processors shift their demand towards pork, which will reduce demand for poultry, Yushin predicts. Andrey Sokolov agrees with him, who calls the trend “short-term”. In his opinion, manufacturers of sausages and deli meats will be the first to react to it, increasing the share of relatively inexpensive pork in the recipe, which will already lead to lower prices for poultry. Then the trend will reach the shelves of stores, Sokolov concludes.