Grim outlook for the Ukrainian poultry industry

Despite a drop in domestic output in 2023, the Ukrainian poultry market still has a production surplus owing to immigration and a drop in consumption, Karpenko said, adding that he didn’t expect demand to bounce back in the foreseeable future.

He called on poultry farmers to be flexible and swiftly react to market changes, adding that for the time being, they will have to rely on short-term planning.

It is estimated that nearly 9 million Ukrainians left their country since the hostilities began. In this background, Ukraine saw its poultry production falling by 8% in 2022 to roughly 1.7 million tonnes. In April 2023, the Ukrainian Institute of Agrarian Economy forecasted a 1.1% rise in output this year, accompanied by a 2-3% decline in pork production and a 12% in beef production.

On the other hand, Karpenko said egg production is expected to increase by 9% to 11% in 2023 compared with the previous year.

New electricity prices to have a profound impact

To some extent, the new production forecast could be associated with rising production costs. As early as in July, the Ukrainian poultry industry will feel the negative consequences of a hike in energy tariffs, the poultry farmers association warned, adding that broiler meat and egg companies would have no choice but to raise the farmgate prices already in August.

The rise in energy tariffs is expected to have a profound impact on production costs, driving up the prices of feedstuff, processing and packaging. The poultry farmers association express concerns that the industry, which is already far from its best shape, “may return to stagnation and see the poultry flock shrinking”.

“A rise in farmgate prices is not a way out of the situation. For manufacturers, this is a forced step since, as always, it would hamper the demand on the market and, accordingly, eliminate the need to expand production capacities,” the association said.

The association called on the authorities to impose a moratorium on raising energy tariffs until the end of martial law. This step, if taken, will allow poultry producers to maintain production volumes and even slightly increase the output while ensuring the country’s food security, maintaining stable prices and continuing to export, the association stated.