Covid-19: Impact on the global poultry sector

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Russian food stamps to help push poultry consumption

Russian meat and poultry producers have asked the government to allocate Rub800 billion ($ 11 billion) for a food stamps programme. The idea is to support demand for the remainder of 2020 for multiple products, including poultry meat and eggs to mitigate the effects of the continuing Covid-19 epidemic.

The food stamp programme would not only support consumers, whose buying power shrank, but would also improve demand for the products of Russian-origin.

The social and economic conditions in the country are complicated with the Covid-19 epidemic,” Sergey Mikhailov, general director of Cherkizovo.

The Russian industry said the food stamps would save jobs and improve operations of food suppliers. Russia’s biggest broiler meat producer Cherkizovo supported the proposal. The food stamps programme could expand the turnover, and this would encourage companies to launch new production facilities, create new workplaces and increase tax payments, Sergey Mikhailov, general director of Cherkizovo said. “The social and economic conditions in the country are complicated with the Covid-19 epidemic,” Mikhailov added.

Russian poultry companies hope that a food stamp scheme can push domestic demand. Photo: Vladislav Vorotnikov
Russian poultry companies hope that a food stamp scheme can push domestic demand. Photo: Vladislav Vorotnikov

The food stamps programme should support 10 million Russian citizens. It is estimated that 20 million consumers in Russia were already below the poverty level before the beginning of the current crisis, and now millions more are expected to lose their jobs, commented Sergey Yushin, chairman of the Russian National Meat Association. As the government is trying to avoid social problems by trying to constrain consumer price hikes, the burden is now on producers. ‘’Our margins are under pressure,” Yushin said.

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Russian poultry industry stays strong

So far, the Russian poultry industry has not been negatively affected with the Covid-19 epidemic, as no company sees its operation disrupted and the demand reportedly remains stable. The average price for broiler meat as of the end of March of 2020 reached Rub105 ($ 1.4) per kg slaughtered weight, up by 3% compared to the previous month and 1% compared to March of 2019, the Russian Agricultural Ministry said in a statement on its website. During March of 2020, Russia exported 22,900 tonnes of poultry for $ 37.3 million. The country continues to increase export to China, which accounts now for some 60% of the Russian poultry export. Cherkizovo expects to triple poultry export to China this year, Mikhailov said.

Covid-19 Up-date
What impact is the pandemic having on the global poultry sector and how are they dealing with it.