April 10, 2023


Russian swine farmers need to meet 50% of internal grain demand to stay profitable



The Russian Union of Pork Producers (RUPP) anticipates that swine farmers in the country need to meet at least 50% of their internal grain demand to remain profitable in 2025, as Russia faces a swine oversupply crisis, Pig Progress reported.


The RUPP also suggests that farmers establish their own slaughterhouses and meat processing infrastructure to stay in business.


The RUPP projects that Russian pork production will increase from 5.28 million tonnes in live weight in 2022 to 6.03 million tonnes in 2025. After 2025, output is expected to stop growing since all new swine farms that received subsidised loans in 2018 will have launched by then.


RusAgro, a Russian agricultural giant, said pork production in the country is expected to grow for the next one to two years, but not beyond that.


Andrey Dalnov, head of the consulting firm AD Libitum, said the Russian swine industry could be hit with its first oversupply crisis in 2023. The profitability of the sector is highly dependent on the price fluctuations in the grain market, which experienced record harvests last year.


The industry has been apprehensive about an oversupply crisis for a few years now, which was averted last year due to a surge in domestic pork consumption. But the industry is unsure if this trend will continue in the coming year.


Yury Kovalev, the general director of RUPP, said that about 60% of the top 20 Russian pork producers already meet their internal demand in grain by at least 50%. But for some companies, meeting their own demand in feed grain may not be feasible, especially in some northern regions with unfavourable weather conditions. Depending on various factors such as climate, it may be less profitable for farmers to grow grain than to buy it from other companies.


Kovalev also said that the top 20 largest Russian swine companies are expected to fully meet their needs in slaughterhouses by 2025.


In the face of price volatility and uncertainty surrounding live pig and half carcass production, swine farmers have two strategies, according to Dalnov. The first involves focusing on the production of simpler products to create a financial cushion during periods of negative profitability, provided there is confidence that production costs will be lower than those of competitors.


The second strategy is to diversify their product line and maximise sales opportunities, Dalnov said.


-      Pig Progress

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