The index of conditional profitability of pork production in March 2017 increased by 6% compared to the same period last year.
This has been reported by agricultural markets analyst Andrei Pankratov according to FAO/EBRD materials.
According to him, in March 2017 compared to March 2016, the index of conditional profitability of beef production was higher by 5% and chicken – less than 1%.
It is noted that the indices of production profitability of all types of meat declined in March 2017 compared to February 2017 due to the followed increase in the price of the feed mix, which consist of wheat, barley, corn, as well as sunflower and soybean meals.
“Thus, domestic meat producers have not yet noticed a noticeable improvement in the profitability of their business compared to the last year, especially if we take into account the fact that they lost the special regime of VAT and have not yet received subsidies”, – the expert said.
Andrei Pankratov stressed that the balance of supply and demand in 2017 indicates a further increase in meat prices, but due to the low purchasing power Ukrainian consumer is going to get used to new prices very slowly. At the same time, as expected, there is an increase in the prices for feed, that is, the cost of production and profitability will remain at the current low levels of the past few years.
“In such situation, it will be very difficult for manufacturers to find opportunities to invest in improving production efficiency, given that biosafety issues are now at the forefront. There is no question of expanding production at this time. State subsidies could, without exaggeration, become a safety belt for the industry – so we”ll see how new schemes for their distribution might work”, – he concluded.
