Is Russia going to an integrated meat production model?

The production costs of the main meats in Russia have been increasing since the beginning of this year. Thus, chicken costs have increased by 35%, pigs by 30% and beef by 10%, according to data from the National Union of Meat Processors in that country.

The low purchasing power of the Russian population did not allow these increases to be affected by the final price of meat. In the face of an average increase in production costs of 30% during 2018, only 3% have been passed on to the consumer. This situation, along with a general decline in per capita meat consumption, has led the Russian meat industry to a complicated situation, if not difficult.

The Russian government is reluctant to raise consumer prices, as it is afraid of new falls in consumption. In view of this situation, meat operators go to those suppliers that are capable of reducing production costs, which favors integration structures to the detriment of the independent meat industries.

Photo: Rawpixel

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