Wholesale chicken prices have dropped: when will it be cheaper in stores?

Chicken meat has dropped in price. However, so far only on the wholesale market and only some parts of the bird

Photo: Evgenia GUSEVA

A month ago, Russian President Vladimir Putin was surprised: why has chicken meat become so expensive? As we have written more than once, since the beginning of the year chicken prices have skyrocketed by 30%. The reasons for the increase in prices were many: the fall of the ruble, the increase in demand and the increase in the price of electricity.

Now that the holiday and barbecue season is behind us and the ruble has risen, chicken meat has become cheaper. However, so far only on the wholesale market and only some parts of the bird.

The executive director of the National Union of Meat Processors, Nikolai Aksenov, said that a chicken carcass now costs 7 rubles less than two weeks ago. See “Numbers Only” for details.

ONLY NUMBERS

Photo: Nail VALIULIN

SO THAT BUYERS DO NOT GO CRAZY

“Of course, the average price has also increased,” says Nikolai Aksenov. – In 2022 – 145 rubles per kg, in 2023 – 170. In retail we buy chicken at an average price of 189 rubles. Additionally, if wholesale prices decline, they are unlikely to decline in retail.

The head of the executive committee of the National Meat Association, Sergei Yushin, explains that retail chains do not always respond to fluctuations in wholesale prices. Those in the premium price segment do not notice such reductions in wholesale prices at all. Low-price stores like “Svetofor” or “Chizhik” can reduce the price to increase turnover, thereby making money.

“But usually stores work with manufacturers under contracts in which the price is fixed for a certain period,” continues Sergei Yushin. – In general, retail should not react to fluctuations in the wholesale market, otherwise consumers would go crazy.

Those who buy meat at wholesale markets include small retail chains, catering establishments and meat processing plants. Its demand for chicken meat has also increased this year. Retail sales of chicken increased by 10-15%, the production of sausages (this requires chicken fillet) – by 7%, and the share of products of maximum culinary preparation increased, including various semi-finished chicken products in dressing.

What will happen to prices for the New Year?

“They are unlikely to increase,” suggests Nikolai Aksenov. – The Ministry of Agriculture and the Federal Antimonopoly Service are following closely. In addition, manufacturers promise an increase in supply on the market.

However, if low prices persist for a long time on the wholesale market, retail may also react. However, it is too early to talk about this.

EXPORT RESTRICTIONS AND CANCELLATION OF DUTIES

To reduce the price of chicken, the Head of State proposed increasing the volume of chicken products on the market. In response to this, the Ministry of Agriculture proposed to partially limit the export of chicken meat from December 1 for six months and cancel duties on imports of products with a quota of up to 160 thousand tons. Final decisions on these issues have not yet been made, but these state support measures are being actively discussed.

Thus, expert Sergei Yushin is sure that in order to saturate the Russian market with chicken, it would be more correct to buy poultry meat in Kazakhstan and Belarus, because deliveries from there are not subject to customs duties. However, there is no need to limit the export of our products.

“We do not eat 85% of what we export,” says the expert. – Wing tips, chicken thighs and other by-products of low demand in our market. By selling these items to China and Vietnam at prices several times higher than ours, we maintain a good profitability of chicken meat in general. We even export carcasses that are not sold here. Less than 1 kg in weight. In the countries of Asia, the Persian Gulf and North Africa they like them, but here we don’t, because there is not enough meat on such a carcass.

According to Sergei Yushin, a restriction on exports, even for six months, will deprive us of our reputation as a reliable supplier and other countries will take our place.

Pork is also getting cheaper

This year, pig farmers are ahead of the poultry industry in increasing production. In the latter case, production growth in the year was 0.2%, as reported by the executive director of the National Union of Meat Processors, Nikolai Aksenov, and in pig farming in September it was +8%, in October +6%. At the same time, it does not increase in price, it becomes cheaper wholesale.

“The process of decline began a month ago,” explains Sergei Yushin, head of the executive committee of the National Meat Association. – In some pieces, such as the collar, prices have dropped by 20%. Other products dropped in price between 5, 10 and 15% depending on the category and region.