Russia moves to high productive self-sufficiency
Poultry production in Russia has improved tremendously over the past decades in terms of production efficiency as well as product quality. Using modern technology, large-scale operations take the lead, playing a significant role in making Russia self-supporting.
By V. Fisinin, President Russian Poultry Union, D. Efimov, Assortment group of companies and S. Cherepanov, Sanovo-Staalkat Group, Russia
The economy of the Russian Federation is an integrated part of the global economy. It is then no surprise that the current crisis affects many sectors of the national economy, including poultry production. Today, the Russian poultry industry is in a critical moment. In this article we will analyse the current status of this sector and forecast its development.
The Russian Poultry Union, which is a voluntary association of domestic poultry producers, recently summed up the statistical data of poultry production over the past year (2008), which marked the beginning year of the state programme for development of agricultural and food production. This programme is extended until 2012. We should emphasise that most Russian poultry producers operate large-scale, industrial-type enterprises. In 2008, they produced 86% of total poultry meat in the country. The remaining 14% was produced by farmers and backyard producers. This structure has been formed in previous decades. These “poultry factories” will continue their dominating position, although development of farmers and backyard production is supported by the government and local authorities. We think that the leading role of industrial-type production is justified, because such enterprises can more efficiently use production and financing resources, introduce new technologies and equipment, etc.
More domestic meat
Because of the presence of industrial-type enterprises, their production potential enables a dominating position of domestic poultry products on the Russian food market (Figure 1). Together with the introduction of import quotes, initiated by the Russian Poultry Union and issued by the Russian government, this resulted in growth of the Russian poultry market (+284,000 t in 2008, or +15% compared to 2007). This was achieved due to additional production of domestic poultry enterprises.
In 2008, 64% of the poultry meat market in Russia was supplied by domestic producers and 36% was imported. Of the total volume (3,495,000 t in slaughtered weight) 2,200,000 t were supplied by domestic producers. This is 300,000 t more than in 2007. The volume of imported meat was 1,295,000 t in 2008, which was the same as in 2007 (Figure 2).
It is obvious, that in a big country like Russia poultry meat production differs in the various regions. Most intensive growth of production was registered in 2008 in Belgorod, Chelyabinsk, Leningrad, Stavropol Regions, the Republic of Tatarstan, amongst others (Figure 3).
The leading role in domestic poultry meat production belongs to several holdings and companies. Due to timely investment into modernisation of their production facilities, introduction of effective technologies and equipment, and the use of modern crosses and strains, they managed to increase volumes of production and achieve high economic efficiency.
Egg production stable
The production of eggs by all categories of producers in 2008 was 37.7 billion pieces, practically the same level as in 2007. The share of industrial-type enterprises was about 75% of total egg production, and the remaining 25% was produced by farmers and on backyards (Figure 4).
In the egg sector there was also a significant difference in production between the regions of the Russian Federation. In several regions egg production in 2008 decreased, but due to growth in other regions (Figure 5) the total level of egg production in 2008 was practically the same, as in 2007.
The favourable situation in Russia’s grain market in the second half of 2008, particularly in the fourth quarter, enabled good profitability. According to an estimation of the Russian Poultry Union, the average profitability in poultry enterprises in Russia was around 5% in broiler enterprises and about 7% in egg enterprises.
Favourable grain harvest
According to the Russian Statistical Committee, about 105 million t of grain was harvested in 2008 (weight after cleaning). This amount fully covers internal demands of the Russian Federation for food and feed grain. Here, 62.3 million t of wheat was harvested, which was 26% more than in 2007. Of this amount, 63% is food wheat and 37% for animal feeding. Good results were also achieved with corn and sunflower.
Despite the fact that the current financial problems made receiving credit more complicated, including credits for buying of grain, the general favourable situation in the grain market helped poultry producers to accumulate grain resources for egg and poultry meat production.
To exclude possible destabilisation of the grain market, the Russian Poultry Union initiates governmental intervention in grain trade and establishing a special insurance fund for feed grain. According to an estimation by the Russian Poultry Union, investment projects worth 55 billion Russian Rubles (over US$1.5 billion) are currently underway in the Russian poultry sector.
Growth expected
Based on the current market situation, specialists of the Russian Poultry Union forecast a growth of domestic poultry meat production to a volume of 300,000 t and growth of egg production of up to 500 million pieces in 2009. Main growth of poultry meat production (70%) is expected in, amongst other regions, Belgorod, Chelyabinsk, Moscow, Novgorod, Rostov, Altai, Krasnodar Regions, and the Republic of Tatarstan. The expected growth of domestic poultry meat production of 1 million t until 2012 will to a large extent depend on the situation in the financial markets, particularly in terms of financing investment projects.
Decreasing solvency of the population can affect the rate of consumption, particularly in the premium niche of poultry products. Nevertheless, during the past few years we have observed a stable tendency of widening of the assortment and diversification of the poultry products market. An analysis of the structure of poultry meat production in 2007-2008 shows some increase of the share of turkey meat (Table 1). Data in Table 2 reflects a tendency in growth of the share of processed, ready-to-cook poultry meat products.
The assortment of eggs and egg products in the past two years was practically the same, though one can see some increase of the share of liquid pasteurized products (Table 3).
Modern technology needed
Increasing production potential is not possible without the introduction of modern technologies and equipment. Today, the leading poultry companies of Russia actively make use of new advanced solutions. The current crisis stimulates introduction of energy- and resource-saving technologies and equipment. Commonly seen is the use of economical local schemes of room heating, growing of broilers and rearing flocks on heated floors.
Very popular are new efficient climate systems with computer control and feeding and watering systems, which help to save feed and water and keep liveability and performance of birds high. Russian poultry producers also typically pay more attention to optimal feeding as a basic element in poultry production. For this purpose the structure of feed formulation becomes more efficiency-oriented. Also popular are biologically active additives, synthetic amino acids, vitamins, feed enzymes, anti-oxidants, mycotoxin inhibitors, probiotics etc. Efficiency of feed consumption in Russia improved considerably over the past years. In 1990, 1.91 kg of feed was needed to produce 10 eggs. In 2005, this figure dropped to 1.4 kg and in 2008 to 1.34 kg. In broiler meat production, the average feed consumed by a broiler to produce 1 kg of meat was 3.44 kg in 1990, 2 kg in 2005, and 1.87 kg in 2008.
Room for new products
Russian poultry producers make use of intermittent and modified lighting regimes to achieve high performance and liveability of their flocks. To get additional profit, many enterprises set up their own facilities for processing of poultry meat and egg. At a Borovskay poultry farm there is an egg breaking and processing plant. This plant is probably the largest in Russia and has a capacity of 1.3 million eggs per day for production of both whole eggs and separated powder and liquid products.
Increasing competition together with an increase in demand from consumers stimulate active development of new poultry products. Evident is a growing production of functional products, enriched by vitamins, amino acids, essential fatty acids, etc. Such products are used in children, dietary and medicinal nutrition. Additionally, poultry producers cooperate with the customers from the food industry and flexibly meet their demands by offering poultry products with special properties, important for the feed industry.
Russian and imported breeds
Modern poultry production is impossible without first class breeding materials and an efficient system of reproduction. Russian poultry meat and egg producers use both domestic and imported strains and crosses with high performance potential. Both on the meat as well as on the egg side, domestic and commercial imported strains are used.
Taking into account the importance of preserving pedigree resources of various species, the Russian Poultry Union has developed and proposed to the Ministry of Agriculture a concept of establishing “pilot enterprises”. These are genetic centres for breeding broiler and egg strains, ducks, geese and turkeys on the basis of the leading breeding companies in Russia.
We should underline that these strains and crosses, bred by Russian breeding companies, meet the demand of domestic poultry producers and are also exported into neighbouring countries. The import of breeding material from abroad is mainly carried out on the level of grand parent and parent stock. Import of final commercial hybrids goes down and the share of GP and PS in total import increases. In 2008, a total of 89,350 GP chicks and 622,580 PS chicks were imported.
Further improvement expected
It is not possible to highlight all aspects of Russian poultry production in one article. It should be noted, however, that for a long time the problem of national food safety was not secured and evaluated properly in the Russian Federation. Gradually, both among governmental bodies and poultry producers, understanding of the fact increases, that food is becoming one of the most important tools of economical and political impact in international relations. The doctrine of national food safety, which now is being developed in Russia, is very important for the further development of the country.
The Russian Poultry Union actively takes part in the development of this document, because it will act as a base for following laws, regulations, and programmes of developments of all national agriculture, including the poultry sector. If measures for diminishing the negative impact of the economical crisis, particularly in the area of financing and credit, proposed by the Russian Poultry Union and poultry specialists will be supported by the government of the Russian Federation, the domestic poultry industry can keep and improve its production potential and efficiently supply the population of the country with affordable, high quality foods.
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