Feed prices reduce Russian poultry profitability

21-12-2012 | | |
Feed prices reduce Russian poultry profitability
Feed prices reduce Russian poultry profitability

The profitability of poultry farming in Russia is gradually decreasing, on average 1% per year since 2005, due to the increase of feed prices , the Russian union of poultry meat producers (Rosptitsesoyuz) stated at a recent conference.

“The drought in 2010 and 2012, which resulted in the significant increase in feed prices, as well as the annual growth of prices for feed ingredients have negatively affect the financial condition of poultry organisations. As a result, the industry average return on sales decreased from 17.6% in 2005 to 11% in 2011, which has a negative impact on the investment attractiveness of the industry” an official said at the meeting.

According to rough estimates the drought in 2012 and the increase of feed prices since July, will lead to the additional decline in profitability to 10% by the end of this year. Potentially, this will reduce the rate of development of the poultry industry in Russia.

During the meeting, participants also expressed particular concern about the increase in grain prices, and feed for poultry which may take place in 2013. They appealed to the Ministry of Agriculture with a request to support the farmers in terms of feed purchases in the next year.

In response to the request Deputy Minister of Agriculture Dmitry Yuriev said that the funds for the purchase of feed will be provided and suggested Rosptitsesoyuz collect the information about the amount of feed demanded for poultry producers in different regions of Russia and submit this to the Ministry of Agriculture. The final amount of funds to be allocated will depend on these statistics.

Vladislav Vorotnikov Eastern European correspondent