The Case of the Bird and the Egg: Poultry farmers are offered to abandon premium products

Poultry farms in RUSSIA may refuse to produce premium products, which include selected eggs and brisket. Rosptitsesoyuz suggested that producers turn their attention to the production of cheaper goods, for example, broiler carcasses and category C2 table eggs. 

As Galina Bobyleva, General DIRECTOR of the Russian Agricultural Union, noted in an interview with Izvestia. the organization recommended manufacturers to concentrate on the production of more budgetary products in early March. it is expected that this will take into account the interests of both producers and buyers. So. factories, refusing a more expensive product, will be able to reduce their production costs, and consumers will be able to receive goods at a stable and affordable price.

“We have advised poultry companies to narrow down the range, which will allow them to reduce their production costs. First of all, for processing. For now, companies should focus on manufacturing goods with less added value,” Bobyleva specified, explaining that this was a proposal to abandon deep processing products.

Such products, which are very costly for the manufacturer, include brisket and thighs.

Bobyleva drew attention to the fact that manufacturers of all food products increased the cost of goods. Since the manufacture of poultry products depends on imported components, the cost of production against the backdrop of currency growth also began to rise. Over the past year, for poultry MEAT and eggs, it increased by 20-25%, but manufacturers practically did not change the selling price of goods, the publication reports, citing data from the union. And in February, producer prices rose by an average of 6% compared to prices. observed in January.

CAN PORK REPLACE CHICKEN?

Andrey Karpov, the HEAD of the Association of Retail Market Experts, said that manufacturers do not have time to meet the increased demand for chicken meat, in an environment where the production of goods is reduced against the backdrop of outbreaks of bird flu in some regions. According to the expert, chicken on store shelves can be temporarily replaced with turkey and pork, and in a couple of months the problem with poultry products on the market will be settled. 

Igor Nikolaev, director of the Institute for Strategic Analysis of the Financial and Accounting Consultants company, expressed the opinion that the measures proposed by the union can make the existing problem less acute, which will help keep the cost of goods stable and avoid freezing prices in the industry.

At the same time, according to the expert, it is important to understand that buyers have a request for a wide range of goods, which in this case will be difficult to implement.

WHAT DO THE MINISTRY OF AGRICULTURE THINK? 

The assortment policy of manufacturers is the exclusive prerogative of the business. It is determined by the market laws of supply and demand, the press service of the Ministry of Agriculture recalled, adding that they have already developed new mechanisms to support industry enterprises, which should allow stabilizing prices for poultry meat and eggs.

The Ministry of Agriculture told Ivestiya. that we are talking about increasing the maximum limit on preferential short-term loans for poultry farmers, as well as prolonging preferential loans for up to 12 years. 

Earlier, retail chains and manufacturers reported to the Ministry of Industry and Trade and the Ministry of Agriculture about an increase in the selling price of eggs and chicken meat. In early March, First Deputy Prime Minister Andrei Belousov instructed the Federal Antimonopoly Service to check the validity of the increase in prices for these goods. After that, some large producers and representatives of federal networks agreed to fix prices for a broiler carcass for 3 weeks.

As Bobyleva clarified, given that poultry accounts for 46% of the total volume of meat resources sold, fixing a single price “for everything at once” will not help, since producers in this case will not be able to cover their costs. At the same time, the reduction in the range of goods for a while was called a more effective measure in Rosptitsesoyuz. 

Eksert drew attention to the fact that at present there is no shortage of poultry products on the market, and in the future such a problem will not arise either. And the measures of the government and the Ministry of Agriculture help to stabilize the situation.

Recall that earlier the Ministry of Industry and Trade, the Ministry of Agriculture and business signed an agreement on stabilizing the cost of a number of goods. The Russian government introduces constant monitoring of prices for basic goods and services.