The price of compound feed production for agricultural animals may jump by about 20% this year, according to a statement by Anastasia Zalutskaya, deputy general director of consulting company ‘NEO Centre’, speaking at the conference ‘Russian Feed Industry’.
“This year’s total grain harvest is likely to be small, which will contribute to the increase of grain prices, but on the other hand, a strengthening of the national currency can be seen, so the feed and meat producers will be affected by the divergent trends,” she said.
Russian rubble is strengthening against the dollar and the euro. At the beginning of 2015 the exchange rate for the rubble was RUB70 per US$1 than now it is about RUB 50 per US$1.
“However, there is no direct correlation between the price of grain and animal feed and the cost of meat,” noted Zalutskaya. “Of course, the cost of livestock production is affected by inflation: feed, hatching eggs, breeding animals became more expensive. But more significantly it is affected by exchange rates, the volume of imports, demand of the population and government policy,” she added.
While meat prices are rising, most producers are feeling comfortable and have the ability to pay more for compound feed production. “But now it is not clear how long the food embargo would last, as this is the main factor keeping prices [for livestock production] high. Currently the situation in the industry is favorable for producers of meat, but future prospects are rather uncertain,” concluded Zalutskaya.