In the Ukrainian agricultural sector, livestock farming is in second place in terms of importance for the economy. The situation on the Ukrainian meat market is constantly changing. Many factors influence the market of meat and meat products:
- cost of production;
- trade restrictions;
- currency exchange rate changes;
- fluctuations in consumer demand.
Also the situation on the meat market affects other sectors: sausage market, milk processing market.
Ukrainian meat market: production volumes
The meat market in 2016 consists of these segments:
- poultry meat;
- beef;
- pork;
- other animals (lamb, goat, etc.).
In recent years, Ukraine has been characterized by a reduction in the number of cattle and pigs. In the first six months of 2016, compared to the same period in 2015, the number of cattle and pigs decreased:
- cattle by 2.4%;
- hogs by 3%;
- poultry by 4.5%.
Meat production in Ukraine in 2016 increased compared to 2015.
For the period January-August 2016, the production of fresh beef increased by 13.9% compared to the same period of 2015 and increased to 35 thousand tons. Frozen beef was produced 7.1 thousand tons. Compared to January-August 2015, its production decreased by 35.8%.
Fresh pork production increased to 167 thousand tons. Compared to January-August 2015, productivity increased by 3%. The performance of frozen pork fell by 31.3% compared to the same period of 2015. A total of 8.1 thousand tons were produced.
The poultry meat market is growing in 2016. In January-August, fresh poultry meat was produced by 1.3% more than in the same period of 2015. A total of 469 thousand tons were produced. Production figures for frozen poultry meat increased by 45.1%. In January-August, 161 thousand tons were produced.
Meat market: exports and imports
In 2016, the structure of meat sales in Ukraine changed. In December 2015, a ban on supplies of meat products to Russia came into effect. In previous years, Russia accounted for up to 90% of Ukraine’s meat exports. The opening of a free trade zone with the EU was supposed to improve the situation on the meat market. Ukraine received quotas for meat supplies.
According to statistics, beef and pork exports fell significantly in 2016. In 2015, pork exports amounted to 27 thousand tons. In the first 8 months of 2016, exports decreased to 1523 tons. Beef exports in 2016 were 9268 tons. In 2015 these figures were – 23398 tons.
Export figures are increasing at the expense of poultry meat. Already in February 2016, Ukrainian producers used all quotas for meat supplies to the EU. Main consumers of Ukrainian poultry meat:
- Egypt;
- Iraq;
- Netherlands.
Ukraine is trying to expand the market for meat products through access to China and South Africa. Companies have paid attention to the individual characteristics of the buying countries. The beef meat market is much broader than the pork market. In many countries, the consumption of pork is prohibited or restricted on religious grounds. Based on these requirements, Ukrainian producers have been able to supply poultry to Israel and Eastern countries.
Problems with exports arise due to the spread of African swine fever in Ukraine. More than 50 outbreaks of ASF have been recorded since the beginning of 2016. Some countries are closing their markets to Ukrainian products. In September 2016, Moldova temporarily banned the import of meat of animals susceptible to ASF from Ukraine. The same bans were issued by Belarus and Armenia.
The largest amount of Ukrainian meat imports is pork and poultry meat. The main importers are Poland and Germany. The share of imports in domestic consumption is about 7%.
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Portrait of the Ukrainian consumer
In recent years, the market for meat products has increased. New Ukrainian and foreign companies have appeared, and consumers have increased their choice of meat products. Meat is consumed by all categories of the population. The choice of meat is influenced by its price. In 2016, consumers began to consume less pork and cattle meat and switched to poultry meat. Chicken meat is cheaper, so it is bought more willingly.
When buying meat, Ukrainian consumers focus on the price-quality ratio. Too low a price discourages the buyer, because he considers such goods to be of insufficient quality or spoiled. At the same time, the market of elite meat products has not been fully formed. Constant currency fluctuations and low wages do not allow to make expensive purchases. Therefore, Ukrainians prefer to buy products of the middle price segment. The main places of shopping are supermarkets and markets.
Rare and expensive varieties of meat are purchased by restaurants that carefully monitor the quality of their products. In the high price segment, eco-meat is becoming popular. Its consumers want to know that the animal lived in favorable conditions, ate natural food and grew up without the help of hormones.
Meat products market: largest meat producers
1. Mironovsky Khleboproduct (MHP) is an agro-industrial holding company uniting several brands: Nasha Ryaba (chicken products), Foie Gras (goose meat), Chateau Galicia (goose products), Certified Angus (beef). In 2015, Agropromholding held 40.7% of the meat market in Ukraine. MHP exports its products to more than 65 countries.
To promote its products, the company studied the chicken meat market. The packaging of “Nasha Ryaba” is decorated in green-yellow colors, which should indicate the naturalness of the product. This is also indicated by the company’s slogans: “Natural products for a healthy life”, “Taking care of the chicken, we take care of you”.
Poultry meat is supplied to foreign countries under the brand name Qualiko. Qualiko’s slogan is Good for your family. Focusing on foreign consumers, the company made a bet on the environmental friendliness of its products. The company ordered a new packaging design. The logo was the letter Q placed on a green background. The brand’s products are exported to more than 60 countries.
In Ukraine, MHP is the only company engaged in industrial production of goose meat and liver. Mironovsky Khleboproduct exports goose products under the Chateau Galicia TM. The brand logo is a golden goose head with a crown on a blue background. When creating the brand legend, the manufacturer pointed to the ecological friendliness of the products and high quality standards comparable to those of France and Hungary. It is these countries that are famous for goose liver products.
2. Agromars Complex. Produces chicken meat under the TM “Gavrilivs’ki Kurchata” since 1998. Produces 9.2% of Ukrainian meat. The second Ukrainian company in exporting chicken meat to foreign countries. Supplies products to Germany, Holland, Ireland, Iraq.
3. Agro-Oven Company. Producer of chicken meat (Zolotko brand), pork and beef. The company’s share in the Ukrainian meat market is 4.6%. The company distributes its products through its own trading network “House of Meat”. The corporate style of stores helps the meat brand to stand out among competitors.
4. agro-industrial complex – Invest. The largest pork producer in the country. The total percentage of production in the meat market of Ukraine is 4.5%. Owns the commodity brand “Myasna Vesna”.
5. APGC Dniprovska. Share in the Ukrainian market – 4%. Produces chicken under the brand “Znatna Kurka”.
Also among the top ten leaders in the meat market are: Vladimir-VolynskaPoultry Factory (brand “Cheboturochka – selyanska kurochka”); Pan Kurcha Company, which produces chicken and pork; Globyn Pork Complex; Ular Farm, which produces poultry meat and certifies its products according to halal standards; Agro-Ros (brand “Zolote Kurcha”).
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Meat market forecast for 2017
Due to the reduction of previous markets, Ukraine will try to find new countries for meat exports. Asian and African markets are promising. To become competitive, Ukrainian producers need to change technologies. The European market is oversaturated with pork. Therefore, it is better for Ukrainian suppliers to pay attention to less common types of meat: mutton, goat meat.
The number of cattle and pigs will continue to decrease. The cost of production will increase, making it more expensive for consumers. Therefore, the percentage of chicken meat consumption will continue to grow.
The situation may be improved by obtaining additional quotas for Ukrainian meat on the European market. Then the country will be able to increase exports of meat products.
Summary
1. In 2016, Ukraine increased production and exports of chicken meat (compared to 2015). Exports of pork and beef fell several times.
2 The opening of a free trade zone with the EU should have helped to establish imports and exports. Analysis of the meat market shows that Ukrainian producers do not fully utilize their meat export quotas. Only poultry suppliers fully cover them. Production of meat that meets special standards will help to increase supplies. For example, kosher or halal.
3. Significant problems with exports arose due to the spread of African swine fever. Due to the virus, many countries temporarily restricted imports of Ukrainian pork.
4. due to the high price, consumers’ interest in red meat decreased. Ukrainians started to buy more chicken. At the same time, the demand for meat of ecological origin has increased. At the same time, the price remains a decisive factor when choosing meat.
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