Dairy stakes are high
Agribusiness feeds country literally and figuratively, with agro-exports bringing in over $5 billion a year in revenue
Due to exchange rate fluctuations in our neighbouring country and difficult market conditions, agro-exports have suffered. Manufacturers are certain that it’s necessary to move from meat to dairy production, since the latter is more profitable. The First Deputy Director for Research at the Animal Breeding Research and Practical Centre of the National Academy of Sciences, Ivan Sheiko, tells us that poultry production costs have risen 1.2-fold, while pork production costs have tripled and those for beef are 5.5 times higher. Meanwhile, there is potential for reducing prime costs of milk and cattle meat by 30 percent, through improving fodder. He tells us, “Why can’t we see milk yields of 6,000kg to 7,500kg per cow? The genetic potential of our dairy cattle stands at 8,000 to 8,500kg per cow per year, but it hasn’t been achieved as yet. Bad forage is the main reason. Regrettably, haylage and silage procured for winter are of low quality. Our main short-term objective is to reduce net costs for milk and meat by about a third, to improve profits.”
Rogachev Milk Cannery goods enjoy demand abroad
Milk production is expected to reach 9 million tonnes by 2020, with exports projected at 5.8 million tonnes. Meanwhile, projections for meat (including processed) exports are 376,000 tonnes in meat equivalent. The Ministry of Agriculture and Food admits that building up the output of poultry and pork is less expedient. The Head of the Ministry’s Main Directorate for Animal Breeding Intensification, Natalia Sonich, explains that there is no plan to restore pig livestock levels to those seen on January 1st, 2013. Profitability and average daily yields are acceptable, with pork production reaching 500,000 tonnes, poultry reaching 605,000 tonnes and beef 720,000 tonnes, by 2020.
“There is no sense in increasing these parameters,” Natalia Sonich believes. “Our core buyer, Russia, meets almost all its domestic needs for pork and poultry itself. Over the coming 5 to 10 years, milk and beef will remain our main exports to that market. Pork production at old facilities accounts for 80 percent of output at the moment, but is set to half, with old, low-profit pig breeding facilities repurposed or closed. Ms. Sonich tells us that all such sites are being inspected. She explains, “Recently, a working group examined three facilities, being considered for redesign or complete closure. Their further upkeep, as well as raised pork production, is inexpedient. Buildings, equipment and technologies all are out-of-date, causing high production costs. At the same time, construction of new facilities will continue; 50-60 percent of products will be manufactured at new facilities by 2020.
Experts ascertain that, by 2020, the volume of meat production (poultry, pork and beef) should fully cover domestic demand, including that of meat-processing companies. As for export diversification, the Ministry of Agriculture and Food is convinced that we must master the Asian, Middle Eastern, South American and African markets, while strengthening our footprint on the Lithuanian, Latvian, Polish and German markets, and enhancing economic collaboration with the EU, USA, China, India and Vietnam.
By Galina Kononova