Feed costs reducing Russia’s poultry industry profits
The profitability of poultry farming in Russia has been in decline by an average of 1% each year since 2005, due to increasing feed prices. This is according to Rosptitsesoyuz (Russian union of poultry meat producers) at their recent conference.
“Drought in 2010 and 2012, which resulted 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’s 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” it was reported at the meeting.
According to rough expert estimates the 2012 drought and the increase of feed prices since July of this year, will lead to the additional decline in profitability to 10% by the end of this year. Potentially, this trend could reduce the rate of development of the country’s poultry industry.
During the meeting, participants also expressed particular concern about the increase in grain prices, and poultry feed which could take place in 2013, and appealed to the Ministry of Agriculture to support the farmers in terms of the feed purchases 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 Rosptitsesoyuz will be responsible for collecting and submiting the information about the amount of feed needed by poultry producers in the different regions of Russia to the Ministry. The decidion on final amount of funds to be allocated will depend on this statistics.
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