Ukraine: Pig industry struggles as pork consumption drops
Ukraine’s per capita pork consumption has dropped by 7 kg or 30% over the past few years, said Olga Makhno, senior analyst on pork production in the Ukraine livestock industry association at a recent press conference in the country’s capital Kyiv.
She added that, despite a drop in domestic demand, the country is on the edge of a shortage of pork and cured pork fat – a staple of the Ukraine cuisine.
Tough years for Ukrainian pork consumers
The past several years have been tough for the average Ukrainian consumer. Falling purchasing power took a heavy on consumption. In 2020, it stood at 15 kg/capita, compared to 45 kg in the European Union and 30 kg in Russia, the country’s Meat Industry Association estimated.
As explained by Nikolay Babenko, the association’s director, the consumption of meat and dairy products in Ukraine is by a factor of 2 to 3 times lower than the minimal level recommended by physicians.
Low incomes change meat eating traditions
Ukraine has historically been perceived as a country of pork lovers, with especially high demand for cured pork fat. However, these days, the per capita pork consumption in Ukraine is not only lower than in Russia but also lower than in Belarus, the Baltic states, and even some countries in the Caucasus.
Read also: Feed costs hurting Ukraine’s pig industry
The main reason is a relatively low purchasing power of the local population. According to Babenko, some Ukrainian families do not see red meat and fish for months on their tables. According to the latest purchasing power study by German market research institute GfK, Europeans have an average of € 14,739 per person available for spending and saving in 2019. Ukraine takes the last place with a per capita purchasing power of € 1,830.
Pork production crisis continues
Against the background of falling demand, domestic pork production has also been falling, Makhno said. The industry has an unprecedented low profitability. “The selling price in live weight by the end of 2020 and the beginning of 2021 was 38-40 hryvnia/kg (€ 1.40). In 2019, it amounted to 44.5 hryvnia/kg (€ 1.50).” Makhno added that the purchasing prices are falling despite a 20-40% jump in production costs.
Most farms have a production cost of 40 hryvnia/kg (€ 1.40), which means that they operate either at zero profitability or suffering losses, Makhno said. This situation is likely to cause a further decline in production, which, in turn, is expected to hamper domestic consumption.
Read also: Ukrainian plans for a breeding farm in KazakhstanUkraine’s pig population is estimated at 5.5 million head. That figure has constantly been shrinking during the past few years. According to Babenko, Ukraine’s pig inventory shrinks by on average 1 million head every year.
Affordable pork imports choke the industry
More affordable pork imports from the Netherlands and Denmark are further hampering the Ukraine pig industry, Makhno said. Import supplies only slightly support domestic demand. However, in the future, Ukraine may lose most of its pig farms and become a major importer of pork in Europe.
