The Russian meat industry: bullish in the face of sanctions

Two and a half years down the line and Russia shows no signs of lifting its food import bans any time soon. 

For the nation’s meat producers this is good news. 

They’ve been busy since the embargo was introduced in 2014 – and their activity highlights the opportunities for animal-rearing and processing technology suppliers.

Russia boosts meat production, imports still key

Let’s be clear from the off: Russia still imports meat. In fact, much of its supply comes from countries that are exempt from its food bans. They’re mainly located in South America. Brazil, Russia’s chief meat supplier, sends 20% of its entire beef exports to Russia for example.

In 2016, says a report by Flanders Investment & Trade, total import volumes of all meat products came to around 849,600 tons, and showing the following split:

• Beef – 363,800 tons
• Pork – 258,700 tons
• Poultry – 223,700 tons

Import substitution remains the key trend for Russian agriculture, however. President Putin has set his nation’s food producers the task of achieving self-sufficiency by just 2020. The meat industry, it seems, is ready to meet this challenge head on.

“Russian manufacturers have invested heavily in new technologies, capacities, and genetic material in recent years,” Sergey Yurin, chairman of the Russian National Meat Association, said in an interview with Global Meat News in July 2017. “The pace of growth in the country’s meat industry almost exceeded the world average rate by threefold during a number of years prior to introduction of these counter measures.”

2016’s activity highlights the growing confidence of Russia’s meat industries. Overall production output grew by 4% that year for a total of 13.9 million tons. For context, Russia produced 13.5 million tons of meat and edible offal products.
 
Overall, Poultry accounts for 44% of total Russian meat output, while pork and beef account for around 31% and 20.5% respectively. Pork production posted the biggest growth, increasing by 9% and hitting a total of 3.34 million tons. 

See below for industry segments by production output:

• Pork – 3.34 million tons
• Poultry – 4.5 million tons
• Beef – 1.63 million tons

Currently, chicken meat accounts for 49% of all meat consumed in Russia. Pork covers 33% of total consumption, whereas beef accounts for 16%. 

Poultry, pork output ready to keep growing

The poultry and pork sectors are also predicted to keep growing as 2020 approaches. By the end of 2017, the poultry industry should show 2.5% expansion, whereas pork could grow by as much as 15%. Beef has been showing a downward trend for the last three years, comparatively, and the industry is expected to retract in 2017 by 1.5%.

Pork is anticipated as becoming Russia’s key meat industry in the coming year. By the end of 2017, production is expected to reach 4.2 million tons – almost a million more than 2016’s already high volumes. If true, this would make 2017 strongest year for pigmeat output for 25 years.

According to the National Union of Pork Producers (NSS), the increase in pork output is down to heavy investment in new manufacturing machinery and production technologies.

Beef tends to be a more expensive option for Russian consumers. With household budgets being squeezed, shoppers are turning to more affordable alternatives to get their daily meat fix, explaining the sector’s downward slide.

Russia’s 5 biggest meat producers

As 75% of Russia’s entire total meat industry is covered by the pork and poultry sectors, it won’t come as a surprise to find out that the nation’s largest producers work in those segments. These are:

• Cherkizovo – Poultry, pig breeding, meat processing – 601,700 tons output
• Prioskolie – Poultry (market leader) – 526,000 tons output
• Miratorg – Pig breeding, cattle breeding (market leader in beef), poultry, meat processing – 438,900 tons output
• BERZK-BelGranKorm – Poultry, pig breeding, cattle breeding, meat processing – 295,700 tons output
• Resurs – Poultry – 270,600 tons output

While Russia is blessed with a surface area greater than that of the planet Pluto, much of its farming and animal-raising acreage is located west of the Urals. It’s in these regions where the bulk of Russia’s meat production takes place. Here is a breakdown of Russia’s top five meat producing regions:

• Belgorod region – 1.6 million tons output – Central Federal District
• Chelyabinsk region – 540,200 tons output – Ural Federal District
• Krasnodar region – 495,000 tons output – Southern Federal District
• Republic of Tatarstan – 484,300 tons output – Volga Federal District
• Stavropol region – 479,700 tons output – North Caucasus Federal District

Russia’s meat industry eyes up exports

While self-sufficiency is the end goal, the Russian meat industry has set its sights on exporting too. Miratorg, for instance, wants to boost its export sales from their current $40 million value to $100 million by the end of 2017. By 2020, Cherikzovo hopes 20% of its entire sales will come from exports.

Dmitry Rylko, General Director of Russia’s Institute for Agricultural Market Studies, believes Russia could become a net exporter of meat by as early as 2025. By then, Rylko predicts Russia could be exporting 1 million tons of meat products a year.

If this is the case, then it means meat producers nationwide will have to invest in new production facilities, more animal-rearing, slaughtering, and processing equipment, and all associated meat production technologies.

This is already happening. Rusagro, for example, is planning on expanding its farm in the Primorye Region of Russia’s Far East. Vadim Moshkovich, the company’s Chairman, said this is a major expansion – one that will have a production capacity of 400,000 tons annually.

With output rising, some big goals on the horizon, and export becoming a real trend, demand for production equipment and technologies is only going to rise. 

Network with Russian meat technology buyers at Dairy & Meat Industry expo

Take advantage of the growing need for world class technologies at the Dairy & Meat Industry show in Moscow.

This exhibition is dedicated solely to the meat and dairy industries – and is your chance to connect with the sector’s key buyers while they are actively searching for new partners, products and solutions. 

Interested in being at next year’s show? Contact our team today to learn more about the event and ways you can take part.


 

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