Tuesday, July 17, 2018

Sverdlovsk authorities assist regional poultry keepers facing production difficulties

The Sverdlovsk regional authorities are lending their support to regional poultry keepers who are combating production difficulties.

Authorities are looking into modernizing the industry, following the example of the Chelyabinsk region, which has outperformed the Middle Urals, producing twice as much poultry meat, Rus Business News reports.

The Chelyabinsk region uses a closed cycle, from the forage resources to the high-level processing of products, to minimize the dependence of their business on external factors.

The Sverdlovsk region will be launching a first-order breeding stock facility that will allow poultry farmers to stop importing parent flocks from other countries, according to Rus Business News.

Among the issues poultry keepers in the Sverdlovsk region are facing are feed costs, which saw a two-fold increase last year, while the price for chicken meat fell 20 percent. The regional government gave broiler farms subsidies of $0.12 for one kilogram of a chicken's live weight, in response. Over five "resuscitation" months, the budgetary allocations amounted to $5.95 million.

Compound feed is produced by four companies at three production facilities in the Middle Urals, which only satisfies 20 percent of demand. For protein-rich feed, the dependence on external supplies is at 100 percent, Rus Business News reports.

Another issues is feed mills, which can accommodate 203,500 tons of corn and small grains, 31,000 tons of grain-protein feeds and 14,000 tons of ready-to-use products. The region will have to increase its storage capacities in order to ensure security.

The region also has to deal with feed delivery, as most feed producers have neither transportation vehicles nor rental possibilities, and railway rates are high. The optimum solution is a heavy-duty truck fleet operated by feed mills, which could help save transport expenses, reduce shipping and handling losses and maintain quality products, according to Rus Business News.

All integrated poultry farms are also in need of profound upgrading. Approximately 55 percent to 65 percent of equipment is worn out, and most production facilities have been operating for 30 years or more.

After upgrades, the Reftinskaya Integrated Poultry Factory will be able to double its poultry meat production by 2016. The factory recently launched a new hatchery accommodating 44.5 million chickens, and a four-tier cage facility for 163,000 broilers will soon be put into operation. Slaughter, poultry dressing and deep processing equipment is also being upgraded. This year, upgrade costs are expected to reach $30 million, two-thirds of which is borrowed capital, Rus Business News reports.

The Refinskaya Poultry Factory has three options in building up its own feed resources. Two include the expansion of the existing production facilities where one of the owners is the Sverdlovsk Region. The third option is building its own feed mill, which would require a sizable investment. If approved and supported by the regional government, the poultry factory will begin the project.

"Feed resources are the key aspect of the further growth of the poultry factory and product cost reduction," the Cabinet of Ministers said, according to Rus Business News. "However, today the Reftinskaya factory accounts for more than 50 percent of the sales of the Bogdanovichi Feed Mill, which is, by the way, the largest producer in our region [with 47.9 percent of the total output].

Denis Pasler, the prime minister of the Middle Urals, said he would support the construction of a feed mill at Reftinskaya if the Bogdanovich enterprise plans are revised at aimed at gradual consumer substitution.

The Sverdlovskaya Integrated Poultry Factory is among Russia's five largest companies in the poultry sector, and it is gradually upgrading its facilities. The Sredneuralskaya Poultry Factory is building a new hatchery, with construction scheduled for completion this year. Pasler said priority must be given to the building of waste treatment facilities, Rus Business News reports.

The Sverdlovsky Breed Poultry Plant is Russia's only selection and genetics center working with egg cross-breeding. It accounts for 10 percent of the world laying-hen market. The plant provides poultry factories and farms with pedigree chicks, and its activities recently caught the eye of a German company that intends to use it for direct sales of its crosses on the Russian market and in neighboring countries, whereas previously, parent flocks selected by Germans were supplied only from Germany, and therefore, imported products were much more expensive.

To solve the problem, H&N International, the German leader in the egg industry, is forging cooperation with the Sverdlovsky Breed Poultry Plant, according to Rus Business News.

The World Trade Organization and the Customs Union have also initiated policies that have proven difficult for the industry. The Customs Union opened up the Russian market to post-Soviet countries that sell poultry products at lower prices. In 2015, the Russian government authorities will stop compensating interest rates on loans, thus undermining the technical re-equipment plans.

The poultry industry in the Middle Urals also may develop high-level processing of poultry meat to increase the price of poultry products and the demand for them, giving producers much better opportunities for sales.