Under conditions of transition to market economy relations, cattle raising industry of Ukraine, including meat branch as well, appeared to be on the verge of survival. It was demonstrated by the sharp reduction of cattle and poultry livestock, decrease of production of meat and meat products, ageing of related equipment, distortion of infrastructure and meat markets, increased competition from the side of foreign producers of meat and meat products etc.
As a result, the consumption level of meat in Ukraine last years averaged to about 33 kg per person (incl. 12-14 kg of pork), which is much lower than the level of the year 1990 (68 kg). To tell the truth, sharp growth of production of domestic poultry meat in 2005 and its import into Ukraine, allows to predict that the mid-annual figure of meat and meat products consumption in Ukraine in 2005 will nevertheless reach a point of 40 kg. On the one hand, this level approaches the domestic consumer to average indices of meat consumption in the world per person, however it is still considerably conceding to the parameters of other European countries – Hungary (120 kg), Germany (86 kg), Holland (180 kg), Poland (78 kg) etc. According to forecasts of the Food and Agriculture Organization of the United Nations (FAO), average consumption of meat in the world will grow up to 41.7 kg per person/year, including 16.3 kg of pork.
During the years of economic crisis in Ukraine, the number of breeding plants and farms had considerably reduced, as well as a valuable gene pool of animals. The same had happened with production quality of cattle raising industry as a whole. The genetic potential of cattle raising industry of Ukraine was weakened by destruction of the former system of animals’ selection concerning, first of all, producers. That lead to primary use of low-value, homebrew producers in farms (so-called producers from own herd). By the year 2000, practically all sectors of a cattle-raising complex became unprofitable.
Alongside with other reasons, deficiency of forage and rise in prices for it have led to growth of the cost price of the cattle raising industry products, decrease in profitability of cattle and a poultry raising and, accordingly, to sharp reduction of livestock. Losses as a whole for Ukraine in 2000 amounted to about minus 44-42% for cattle and pigs raising, and minus 33.2% for poultry farming (in 1990 accordingly +20.6 %; +20.7 % and +17 %). At present according to estimations of State Statistics Committee of Ukraine, only poultry farming sector has positive profitability parameters (11% in 2003; 4.1% in 2004). Losses generated by pigs growing on the average for Ukraine in 2004 were estimated by State Statistics Committee of Ukraine at a level of -14.4%. At the same time, the private operators of the market estimate the realistic profitability of pigs farming (breeding and meat production), excluding unprofitable farms at a level of 25 up to 40% on the average.
Since 1990, the livestock of pigs, cattle and poultry (accordingly the quantity of meat) reduced by two-three times. By the beginning of the year 2006 about 6.7 million heads of cattle, 6.9 million heads of pigs and 162.9 million heads of a poultry was registered in farms of all categories in Ukraine, while the production of meat of all kinds in slaughtered weight was equal to about 1.85 million tons in 2005 (in 1990 respectively 25.2 million heads, 19.9 million heads, 255.1 million heads and 4.36 million t of meat). The share of pork now is equal to about 35 % (or 620 thousand t) of the total production of meat of all kinds (in slaughtered weight).
Since 1990, the structure of cattle, pigs and poultry raising has changed. Before disintegration of the Soviet Union the major part of livestock has been concentrated in public sector, while now about 63% of an aggregate number of the livestock of cattle, 63% of the livestock of pigs and 60 % of the livestock of poultry are kept in private farms.
It is necessary to note, that during the recent years positive tendencies of growth were noticed in poultry and pigs farming. The rates of growth in these sectors compared to the last year have grown accordingly by +6.6 % and +7.3 % in 2005. Negative processes are still observed in the cattle sector – in 2005 livestock of cattle went down by 3.6 % compared to 2004. At the same time, taking into account unpredictability of animal industries products” market behavior (bird”s flu, instability of prices for energy and mixed fodders, price politics concerning meat, problems with selling domestic animal industries products on foreign markets, illegal import of meat and meat products, instability of foreign trade with Russia and so forth), it is too early to speak about any significant achievements in this segment. According to preliminary estimations for the year 2005, the negative balance in the foreign trade with meat and meat products is expected, owing to reduction of export of a beef and separate kinds of products of meat processing, and due to an increase in deliveries of live pigs, ready meat products, and so forth. The estimated cash value of export of animal industries” products in 2005 will decrease by 10% compared to 2004, and negative balance (export to import) at the end of 2005 can make about $35 million.
Despite of the certain steps of the state aimed at support of domestic animal industries complex, including acceptance of various programs, partial subsidizing of farmers, this market is still in a crisis conditions, including the pig-breeding market. Only the large pig-breeding farms, which are a part of large integrated complexes and those having the full cycle of production, are able to introduce modern technologies of pigs raising and processing. Profitability of pigs raising in such farms reaches 40-65%. However, this has a little influence on the general figures of pig-breeding branch as a whole. The branch demands considerable state and financial support, including low credit rates, duly payments of subsidies, and resolution of problems with foreign trade by animal industries” products, and finally – growth of competitiveness of domestic meat, both on internal and external markets.
The question of development of pig-breeding branch acquires a special urgency in connection with unpredictability and danger of development of a situation with the bird”s flu. It is obvious already today that the development of both Ukrainian and Russian poultry-farming branches can be sharply impaired. In connection with this issue, a question of covering of the growing demand for meat products by means of offer of other kinds of meat is very urgent. The pig-breeding looks as the most perspective branch as a real alternative to poultry farming.
Taking into account a norm of pork consumption authorized by Ministry of Health of the Ukraine equal to 30 kg per year per person, it is possible to estimate potential cash value of the pork market at 15″126 million UAH, or $2″995 million per year (the exchange rate of the NBU of 5.05 UAH/USD at 01.01.2006).
