December 20, 2013
In the first nine months of this year, Russia's egg prices rose, on average, by 20%, while in some regions as much as 25%-30%, according to the data reported by the Russian Federal Static Service.
Retailers are blaming the price hike on the fact that manufactures increased their prices, while the largest poultry farms blame the rapid rise of feed costs. However, manufacturers claim that the money that they get for their egg products even with the price increase is barely enough to make ends meet.
"With this price we are at least able to survive, as we can pay for feed and electricity, but still we cannot pay off the debts to banks; poultry producers in Russia currently have a lot of loans," said the head of the Board of Directors of the Poultry Producing Company Lenoblptitseprom Yuri Trusov. According to him, the cost of feed grain during the current year has increased by 200%, which hurts poultry producers' profit margins.
He said that in August 2012, grain prices have gone up dramatically, and the purchase price of eggs remained at RUB20-22 (US$0.61-0.67) while the production cost was at RUB33 (US$1). If the government order a price reduction, all poultry farms will simply shut down operations. He added, "Currently egg producers do not exceed a 3% profit margin".