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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Ukraine Chicken Production Impacted by Feed Costs and HPAI

03/09/2021

According to USDA-FAS-GAIN Report UP2ND21-0012 released on March 1st, Ukraine will experience a 3.4 percent decline in total production from 2020 to 2021.  For the market year beginning January 1st, chicken production is estimated at 1.375 million metric tons down from 1.423 metric tons in 2020. Domestic consumption is estimated at 54.4 lbs. per capita based on a population of 44.5 million. 

 

In 2021 USDA-FAS projected exports of 0.41 million metric tons representing 29.6 percent of total production. In 2020, Ukraine exported 0.78 million metric tons of RTC in the form of bone-in cuts and whole birds to the E.U., This volume will be curtailed by HPAI in 2021. Ukraine exports to the Middle East, the Russian Federation and North Africa including Egypt.

 

Approximately 80 percent of chicken production is from vertically integrated companies with MHP the largest with an output of 0.73 million metric tons.  This producer exports 53 percent of production and recently expanded to Slovenia.  The second largest producer Agromars ceased production in December 2020 due to their inability to service debt.  This producer was committed to the market in Ukraine.  Five midsize chicken producers and a number of regional operators are responsible for ten percent of output.  The largest companies produce their own grains in a policy common in Eastern Europe to constrain production costs. Restraints to profitability in 2020 included numerous outbreaks of highly pathogenic avian influenza depriving some producers of export markets including the E.U.  Inefficient management and accumulation of debts resulted in the demise of Agromars that once supplied seven percent of the market.

 

In 2020 escalation in feed costs were not compensated by proportional increases in unit revenue.  Subject to restrictions relating to HPAI the largest Ukrainian producer MHP will continue to supply the E.U. under the Deep and Comprehensive Free Trade Area Agreement.  It is possible that Ukraine may be able to ship to the U.K. as a result of the Free Trade and Strategic Partnership Agreement that came into effect on December 31st 2020 when the U.K. withdrew from the E.U.
HQ of MHP Poultry Company, Ukraine

 

 

 


 
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