Cherkizovo, Russia's biggest meat group said earnings rose by 21% 2010 but warned of a "challenging" outlook for this year, thanks to higher feed costs and a difficult pricing environment. The problem with higher feed costs is that farmers are slaughtering cattle and therefore there is a relative oversupply in the market. This makes it difficult to pass on higher operating costs by raising meat prices. The company had $144.4m in earnings last year. Russia's swine herd fell last year for the first time since 2004, according to official data. Russia's feed availability was 25% lower at the start of 2011 than a year before, US Department of Agriculture attaches in Moscow said in a separate report. Cherkizovo said that "to some extent [meat] pricing action will offset the impact of rising costs". "But, given the weak pricing environment in the fourth quarter of 2010, pricing is likely to be more pronounced in the second half of the year," although poultry prices were set to start rising in the April-to-June period, thanks to a cut in Russian import quotas.

UkrAgroConsult