Poultry and Products Annual

An Expert's View about Poultry in Russia

Last updated: 4 Sep 2011

Normalized feed prices and continued investment will continue to drive Russian poultry production increases and more than offset approved tariff-rate quota quantity reductions in 2012, supporting significant room for consumption growth.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 8/16/2011 GAIN Report Number: RS1139 Russian Federation Poultry and Products Annual Consumption Recovers Strong in 2012 Approved By: Morgan Haas Prepared By: Morgan Haas, Mikhail Maksimenko Report Highlights: Normalized feed prices and continued investment will continue to drive Russian poultry production increases and more than offset approved tariff-rate quota quantity reductions in 2012, supporting significant room for consumption growth. No significant adjustments are made to FAS/Moscow?s 2011 outlook. FAS/Moscow estimates are not official USDA data. Official USDA data is available at http://www.fas.usda.gov/psdonlineonline. Executive Summary Normalized feed prices and continued investment will continue to drive Russian poultry production increases and more than offset approved tariff-rate quota (TRQ) quantity reductions in 2012, supporting significant room for consumption growth. No significant adjustments are made to FAS/Moscow?s 2011 outlook. Table 1. Russia: Broiler Production, Supply & Demand, 1,000 MT (ready-to-cook) Poultry Meat, 2010 2011 2012 Broiler Marketing Year Begin: Jan 2010 Marketing Year Begin: Jan 2011 Marketing Year Begin: Jan 2012 Russia USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 0 0 0 0 0 Production 2,310 2,310 2,520 2,520 2,750 Whole, Imports 22 22 8 4 4 Parts, Imports 596 596 367 371 350 Total Imports 618 618 375 375 354 Total Supply 2,928 2,928 2,895 2,895 3,104 Whole, Exports 1 1 2 1 2 Parts, Exports 4 4 6 2 3 Total Exports 5 5 8 3 5 Human Consumption 2,923 2,923 2,887 2,892 3,099 Other Use, Losses 0 0 0 0 0 Total Dom. Consumption 2,923 2,923 2,887 2,892 3,099 Total Use 2,928 2,928 2,895 2,895 3,104 Ending Stocks 0 0 0 0 0 Total Distribution 2,928 2,928 2,895 2,895 3,104 Table 2. Russia: Turkey Production, Supply & Demand, 1,000 MT (ready-to-cook) Poultry, Meat, 2010 2011 2012 Turkey Marketing Year Begin: Jan 2010 Marketing Year Begin: Jan 2011 Marketing Year Begin: Jan 2012 Russia USDA Official New Post USDA Official New Post USDA Official New Post Beginning Stocks 0 0 0 0 0 Production 45 70 55 90 110 Whole, Imports 0 0 0 0 0 Parts, Imports 25 35 10 33 30 Total Imports 25 35 10 33 30 Total Supply 70 105 65 123 140 Whole, Exports 0 0 0 0 0 Parts, Exports 0 0 0 0 0 Total Exports 0 0 0 0 0 Human Consumption 70 105 65 123 140 Other Use, Losses 0 0 0 0 0 Total Dom. Consumpt. 70 105 65 123 140 Total Use 70 105 65 123 140 Ending Stocks 0 0 0 0 0 Total Distribution 70 105 65 123 140 Production According to Russia?s State Statistical Service (Rosstat), farms of all types produced about 4.6 MMT of poultry and livestock for slaughter (live weight) in the first half of 2011, 3.8 percent more than January- June 2010. Agricultural enterprises increased production by 7.4 percent at the same time. The Russian Ministry of Agriculture (MinAg) reported in the middle of July 2011, Russia will increase livestock production by 2.8 percent, while total agricultural production will grow 10.0 percent in 2011. To accomplish overall production goals, the GOR has taken several measures related to feed costs. At the end of July, the Ministry of Finance began signing agreements with local administrations to transfer an additional RUR9.0 billion ($353.6 million) to poultry and pork producers with the stated aim to combat feed cost related losses. Earlier in the year, the Russian government exercised commodity interventions, distributed grain without auctions, and supported preferential railway tariffs on grain transportation. In June 2011, grain prices decreased 20-22 percent, compared to RUR5.5-5.95/MT in January 2011. According to MinAg, grain stocks amounted to 24.8 MMT at the end of May 2011, which they expected to be sufficient for feed supply through 2011. As a result, on July 1, 2011, Russia lifted the export ban on grain, which had been in place for more than 10 months. FAS/Moscow?s August forecast that grain and legumes supplies will be 45 percent higher in 2011/12 than 2010/11 indicates feed supply should be available at appropriate prices for the Russian poultry industry over the next year. To support future growth, MinAg is currently developing a new state program for agricultural development through 2020. The goals of the program are to ensure the country?s food security (in accordance with the parameters set by the Food Doctrine ? 85 percent self-sufficiency), profitability, financial stability, and competitiveness of agricultural producers in internal and foreign markets. The new program will include new sections, including development of the food processing industry. Broiler production FAS/Moscow forecasts Russian broiler production to remain relatively steady at 9.1 percent growth in 2012, following a reaffirmed 9.0 percent growth rate in 2011. [NOTE: In the first half of 2011, Rosstat reported broiler production increased 11.8 percent at agricultural enterprises, up to about 1.85 MMT (live weight). However, FAS/Moscow understands historically preliminary Rosstat data has a tendency to over-estimate current year production.] Continued expansion reflects improved feed supply and continued GOR efforts to support production. Further, as MinAg admits, competition with imports is increasingly limited by the TRQ regime, which helps support high for domestic producers. Under these conditions, investment in the sector, specifically construction and renovation of facilities, will drive growth in the medium term. Production growth remains driven by Russia?s largest producers. According to the Russian Union of Poultry Producers (Rosptitsesouz), in 2010, 32 enterprises produced more than 20,000 MT annually, and represented 63 percent of Russia?s total broiler production. The top-3 enterprises were ZAO Prioskoliye (267,000 MT), OOO Belgrankorm (99,000 MT) and ZAO Belaya Ptitsa (White Bird) (76,000 MT), and all are located in Belgorod oblast. According to various sources, announced development projects indicate as much as 600-700,000 MT of new broiler production could come online within the next couple years. Of particular note, Russia?s leading pork producer ? Miratorg ? has plans to join the poultry industry and produce 105,000 MT annually. Turkey production FAS/Moscow forecasts sustained turkey production growth in Russia through 2012, based on continued investments into the industry which are scheduled to come on line in the near future. According to market research from Intesco Research Group, ?Turkey Market Preliminary 2010 Results,? 2010 production surpassed Russia?s production target (published in December 2010) of 62,000 MT to reach 78,000 MT. State production targets in 2011 and 2012 were also earlier set at 81,000 MT and 122,000 MT, respectively. In response, FAS/Moscow adjusts our 2010 estimate slighter higher and reaffirms our 2011 estimate. According to the Intesco Research Group, 20 turkey-producing companies currently operate in Russia; however, Evrodon is far and away the market leader and almost single-handedly driving Russia?s turkey production development. Chart 1. Russia: Top Turkey Meat Producers in 2010 Source: http://marketing.rbc.ru/news_research/17/02/2011/562949979729308.shtml In follow-up to FAS/Moscow?s March report, Evrodon confirmed increasing turkey production to 32,000 MT (live weight) in 2010 from 12,000 MT in 2009, following the first stage of a planned 60,000 MT expansion by 2012. Almost immediately following, Evorodon plans to start another 60,000-MT project in Saratov oblast, starting in 2012. Duck production Evrodon is set to also become the largest duck meat producer in Russia. In Rostov oblast (south of Russia), it is investing RUR5.0 billion ($178.6 million) into the construction of a hatchery, parental flock, duck raising houses, feed production plant and meat processing facility, which will produce 20,000 MT annually. The average farm-gate price of chilled duck meat is planned to be RUR150- 170/kg ($5.40-6.10/kg). Trade Leading up to congressional elections this fall and the Presidential election next spring, both President Dmitry Medvedev and Prime Minister Vladimir Putin have been very outspoken regarding Russia?s accession to the WTO and its potential impact on agriculture in recent months. Specifically, Prime Minister Putin has noted there are lines which Russia may not cross. These are volumes of meat production subsidies and tariff rate quotas. ?And we want to assure you, we will consider these issues very carefully. We will not accept any solution that would put our manufacturers at a distinct disadvantage or would undermine their competitiveness.? Imports Reflecting already GOR-approved TRQ access for 2012, FAS/Moscow forecasts poultry imports slightly lower in 2012 compared to 2011. Russia and Belarus have has not yet announced bilateral 2012 quotas levels, but a similar 15,000-MT duty-free import quota could be likely. Prime Minister Putin indicated his GOR resolution on 2012 TRQ quantities could be changed, pending Russia?s accession to the WTO. However, as currently approved, the overall poultry quantity is lowered 20,000 MT to 330,000 MT. For the first time, the poultry TRQ is broken into two categories for mechanically-deboned meat (MDM) (80,000 MT) and other parts (250,000 MT). As in 2011, whole birds are excluded from the 2012 TRQ. The in-quota and over-quota tariff rates are 25 percent but not 31,500 10.7/369 n/a oblast Tambov Inzhavinsk poultry slaughter house, feed 90,000 8.5/293.1 2011 oblast farm meal, elevator, cold storage Saratov Tatishchev poultry feed meal, slaughter 31.5 10.7/36.9 n/a oblast farm house, deep processing facility Bryansk Miratorg grain production feed 105,000 13.9/479.3 n/a oblast meal, hatchery, reproducer, slaughter house, deep processing facility Novgorod Rubezh The whole cycle 102,000 10/344.8 n/a and Pskov production with parental (will oblast flock increase to 150,000) Samara Development Feed meal, hatchery, 50,000 9/310 n/a oblast corporation of slaughter house, Samara oblast processing facility Ivanovo n/a Broiler facility 51,900 6.4/220.7 n/a oblast Turkey Saratov Evrodon hatchery, slaughter house, 60,000 18/620.1 Start 2012, oblast processing facility, End 2013 elevator, feed meal Agrosoyuz slaughter house, 1,300 2.7/93 n/a processing facility, feed meal Penza oblast Russian Milk feed meal, hatchery, 15,000 4.5/155.2 n/a Company slaughter house, processing facility Sverdlovsk n/a Turkey facility 10,000 2.5//86.2 2013 oblast Source: Agro Investor magazine, #8, August 2011; Regional Ministries of Agriculture Table 6. Russia: Meat and Poultry Production at Ag Enterprises, YTD, 1,000 MT (live weight) Total Cattle Pork Poultry Jan-10 451.3 72.1 107 269.0 Feb-10 455.7 76.9 115.6 260.2 Mar-10 515.7 85.8 137.8 290.1 Apr-10 507.6 82.1 135.4 287.2 May-10 493.1 75.5 130.8 283.9 Jun-10 479.1 75.1 133.5 267.0 Jan-Jun 2010 2,902 467.5 760.1 1,657.1 Jul-10 474.8 71.2 128.8 271.7 Aug-10 481.3 75.0 130.5 271.2 Sep-10 518.1 87.6 135.7 289.9 Oct-10 521.8 84.6 134.5 297.7 Nov-10 532.2 82.4 139.9 302.3 Dec-10 625.0 105.0 174.0 330.1 Jul-Dec 2010 3,153.2 505.8 843.4 1,762.9 Jan-Dec 2010 6,055.7 973.3 1,603.5 3,420.3 Jan-11 491.1 69.6 119.8 297.5 Feb-11 485.4 68.2 127.5 287.2 Mar-11 544.2 74.1 148.5 318.2 Apr-11 528.7 73.1 143.4 309.7 May-11 536.0 67.0 141.0 324.4 Jun-11 530.6 67.7 142.3 316.2 Jan-Jun 2011 3,116 419.7 822.5 1853.2 Source: Rosstat http://www.gks.ru/free_doc/new_site/business/sx/tab-sx-oper.htm Trade Tables Table 8. Russia: Broiler meat imports Partner Value ($1,000) Volume (MT) Country Annual Year to date Annual Year to date June- June- % ? June- June- % ? 2009 2010 2009 2010 10 11 10 11 W 1,027,47 822,39 175,44 243,50 913,21 618,44 117,57 163,93orld 38.79 39.43 2 3 6 8 6 5 5 3 EU 232,83 - 144,30 173,95 - -27 180,111 80,734 53,674 62,670 30,316 7 33.52 7 3 51.63 Un 330,97 103,05 587.6 694,35 294,92 477.4ited States 714,580 14,986 15,146 87,457 4 9 7 7 0 2 B 241,71 137,46razil 122,850 75,731 77,818 2.76 66,147 36,693 41,326 12.63 6 8 109,30 14,658 - France 85,846 21,253 44.99 82,832 90,586 9,205 8,674 8 , 54.19 Germ - any 70,252 44,764 36,669 19,982 40,482 24,984 31,637 14,491 - 5.77 45.51 Denm - ark 9,341 26,082 12,449 6,328 38.79 6,187 19,568 9,202 2,548 72.32 Source: GTIS Table 9. Russia: Turkey meat imports Partner Value (USD) Volume (MT) Country Annual Year to date Annual Year to date % ? June- June- % ? 2009 2010 2009 2010 June-10 June-11 10 11 W 65,164,0 64,400,2 21,854,0 21,345,9 40,99 35,12 12,44 11,62 - orld - 2.32 32 92 35 64 3 1 1 5 6.56 14,946,8 13,701,4 10,369,3 12,147,9 15,54 11,31 48.0 France 17.15 3,491 5,168 26 15 68 10 7 3 3 B 17,210,2 28,110,7 3,667,89 5,192,09razil 41.56 5,701 8,177 3,271 3,460 5.79 87 38 2 5 - Germ 6,334,67 13,386,0 3,544,78 1,688,71 - any 6,737 9,042 2,841 1,641 42.2 4 19 0 7 52.36 3 - B 809,85 3,598,36 1,334,77 - elgium 4, 678,352 5,118 3,998 1,451 692 52.3 0 9 8 49.18 1 - Hu 3,913,72 1,896,53 - ngary 441,717 675,954 242 1,557 718 268 62.6 3 9 64.36 3 Un 19,260,1 114.2 99.7ited States 234,166 234,166 501,801 6,089 98 98 196 63 9 5 Source: GTIS Table 10. Russia: Broiler meat exports Partner Value (USD) Volume (MT) Country Annual Year to date Annual Year to date 2009 2010 June-10 June-11 % ? 200 2010 June June- % ? 9 -10 11 W 7,700,85 18,743,5 10,148,1 8,633,52 - 6,52 19,16 9,09 10,97orld 20.74 6 42 31 6 14.92 9 7 2 7 EU - - -27 45,026 111,149 57,106 884 45 65 25 0 98.45 99.43 Ho 6,082,87 2,057,81 4,216,99 104.9 1,23 2,41 171.0ng Kong 678,626 8,420 6,553 8 8 1 3 6 8 4 Vietn 27,83 4,794,75 2,573,48 2,701,68 2,58 3,65am 1,4 4.98 6,676 3,604 - 1.47 0 2 6 3 4 8 A 2,709,47 2,028,28 1,31bkhazia 602,653 815,561 35.33 927 283 343 21.18 1 4 2 Source: GTIS Table 7. Russia: Tariff-Rate Quota Quantities 2009 2010 2011 2012 Poultry, fresh, chilled or frozen 952 780 -- -- --EU 185.8 144.3 -- -- --United States 750 600 -- -- --other countries 24.4 35.7 -- -- Poultry, frozen chicken and turkey MDM 80 P -- -- 350 oultry, frozen chicken parts 250 Pork, fresh, chilled or frozen 531.9 472.1 472.1 320 --EU 253.4 225 225 n.a. --United States 100.0 57.5 57.5 n.a. --Paraguay 1 0 n/a n.a. --other countries 177.5 189.6 189.6 n.a. Pork Trimming -- 27.9 27.9 30 Beef, fresh and chilled 29.5 30 30 30 --EU 29 29 29 n.a. --other countries 0.5 1 2 n.a. Beef, frozen 450 530 530 530 --EU 355.5 60 60 n.a. --United States 18.5 21.7 41.7 n.a. --Paraguay 3 3 n/a n.a. --other countries 73 448.3 428.3 n.a. TOTAL MEAT & POULTRY 1,961.9 1,840 1,410 1,240 Sources: GOR Resolution #1021 (2009); GOR Resolution #1111, (2010); GOR Resolution #616 (2011) Price Tables Chart 2. Russia: Prices for Whole Birds and Chicken-leg Quarters (RUR/kg) Sources: Ministry of Agriculture; Rosstat
Posted: 31 August 2011, last updated 4 September 2011

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