The price of pork after chicken reached a record high in 8 years

The cost of live pigs and basic cuts in the wholesale sector this week rose to an 8-year high. This is evidenced by the data of price indices of the analytical agency AD Libitum and monitoring of prices for 2015-2022, which are at the disposal of Vedomosti.

Since the beginning of this week, commercial pork has risen in price by 7% to 148 rubles. per kg, which is 20% higher than in the same period last year and is a record price for the last eight years. The cost of the neck increased by 9% to 500 rubles. per kg (40% more expensive than in the same period in 2022), carbonade – by 12% to 322 rubles. per kg (+28% yoy), ham — by 11% to 316 rubles. per kg (+37%), shoulder blade — by 12% to 308 rubles. per kg (+50%), brisket — by 3% to 215 rubles. per kg (+39%).

Ad Libitum believes that the sharp acceleration in value growth is due to the lack of volume to meet demand in the large wholesale and meat processing channel, the agency says. According to their forecasts, pork producers may continue to raise prices until mid-August. The agency itself declined to comment further.

The National Union of Pig Breeders did not comment on the situation.

Manufacturers raise prices for wholesalers and meat processors to support the level of shipments in the network and HoReCa, where there is increased demand due to the holiday season, says a Vedomosti source in one of the manufacturers. Miratorg announced an increased demand due to the barbecue season.

The upward trend in wholesale prices for pork is also confirmed by the owner of Lazarevskoye farm Kristina Romanovskaya, who explains this by an increase in production costs. This is due, among other things, to a shortage of personnel in the industry along the entire production chain, Miratorg explained. According to the representative, the company is forced to raise salaries in order to compete in the labor market with the construction complex, processing enterprises.

Other major pork producers – Sibagro, RusAgro, Agroeco – did not respond to Vedomosti’s inquiries.

Pork has begun to catch up with the sharply risen in price of chicken, says Konstantin Korneev, executive director of the agricultural consulting company Rincon Management. Processors are shifting towards pork, and the increased demand for it is associated with a more expensive type of related meat – chicken. According to AD Libitum, the price of a broiler carcass in the week ending August 6 increased by 4% to 192 rubles. per kg, which is 38% higher than a year earlier, fillets – by 3% to 325 rubles. per kg (+42% yoy).

Meat processors “are watching what is happening with horror,” says Ekaterina Luchkina, director of the Association of Meat Processors (ASOMP). She agrees that the price of poultry is a big driver. The reorientation of processors has done its job, as a result of which the price of pork has already gone up. At the same time, in a situation where there is enough production for consumers of all categories, prices do not rise, Luchkina points out.

According to Rosstat, the production of pork in live weight for 6 months of 2023 increased by 5.9% to 2.7 million tons, chicken – by 1.6% to 3.2 million tons.

A sharp increase in the cost of pork is also noted by retail chains. Thus, a Vedomosti source in one of the federal retailers says that over the past three weeks, purchase prices have increased by an average of 20%. The source says that the retailer is holding back shelf prices: over the same period, they increased by 5%. IN X5 Group, “Magnite”, Auchan, “Lente”, as well as in the Association of Retail Companies (unites leading retail chains), did not answer questions from Vedomosti.

The increase in wholesale prices for live pigs and half carcasses (they have risen in price by 6% over the week to 214 rubles per kg, which is 22% higher year-on-year) is not yet being broadcast on store shelves, Miratorg assured.

According to Rosstat, boneless pork in the consumer sector in June 2023 cost 401.15 rubles. per kg, which is 1.1% lower than a year earlier.

A source in Agropromkomplektatsiya Group of Companies (Blizhnie Gorki brand) also assured that the cost of the company’s products on store shelves has not changed recently.

But the situation with rising prices for live pigs from other pig farmers leads to competition for meat between end-users and producers of sausages and semi-finished products, notes one of the processors. “So far, the end consumer is the winner,” he assures.

The meat production business was built with large-scale government support, Luchkin recalls. In her opinion, all this presupposed, among other things, the saturation of the domestic market with meat at an acceptable price. The government has a huge number of mechanisms for operational influence on the situation, says Luchkina. An interlocutor in one of the processors recalls that in March 2021, when the price of chicken rose sharply amid a decrease in output, the Ministry of Agriculture insisted on voluntary price fixing for carcasses by producers and chains.

Back in the spring, analysts noted that the price of chicken is much higher than that of pork, says Romanovskaya. At the same time, regulators took the rise in the cost of a broiler calmly, she continues. Romanovskaya expects the pork market to be the same. Miratorg predicts stabilization and decrease in wholesale prices for pork in September-October. AD Libitum is also counting on the fact that a fall in consumer activity and an increase in supply should stabilize prices.