AgMin expects increase in beef production in Russia this year

MOSCOW. June 27 (Interfax) - Beef production in Russia is expected to grow this year, the Russian Agricultural Ministry has said in a statement.

"Production of cattle (live weight) this year is at a level comparable to last year. The current structure of the meat and meat products market makes it possible to forecast an increase in beef production by the end of 2022," the ministry said without specifying the parameters of possible growth.

This will be facilitated by "unprecedented measures of state support for the industry," the Agriculture Ministry said. "Livestock breeders are reimbursed for their costs of production, purchase of young animals, technological modernization of facilities, improvement of work in the field of livestock breeding. The soft lending mechanism is in demand - producers can get loans for the purchase of fodder, equipment, veterinary drugs, construction and modernization of livestock facilities," the ministry said.

According to Rosstat, cattle production by agricultural organizations has increased by 1.2% in 4M 2022. In April, production decreased by 5.1%, to 85,300 tonnes.

As the Kommersant newspaper reported on Monday, Russian beef producers are experiencing problems because of low prices insisted on by meat processing plants and have begun to refuse to sell cattle for slaughter so as not to operate at a loss.

Beef prices have been dropping for the third month in a row, Kommersant said, and have dropped 15% in the last week alone. This trend is prompted by growth of cheap imports. In 2022, the Agriculture Ministry allowed the import of 200,000 tonnes of zero-duty frozen beef in order to stabilize prices. Previously the duty was 15%.

Gains for the ruble have additionally increased the benefit of imports, and these deliveries may continue to grow, Kommersant cited Sergey Yushin, head of the National Meat Association, as saying. As of the end of June, imported beef is much cheaper than Russian beef, so meat processing plants cannot sell products at a profit after cutting and slaughtering.

In this situation, a drop in domestic production and increased dependence on imports cannot be ruled out, the newspaper's sources said.