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USDA International Egg and Poultry

26 June 2013

USDA International Egg and Poultry: UkraineUSDA International Egg and Poultry: Ukraine

Ukraine’s broiler meat production is expected to surpass domestic broiler meat consumption in 2013. Broiler producers started significant production expansion in the early 2000’s.
USDA International Egg and Poultry

In the following years, Ukrainian poultry producers took a break, concentrating on optimization of the existing facilities and investing into production risk mitigation through vertical integration. Owning feed mills, common for the big production farms, quickly expanded into land, machinery, distribution centers, logistics, and even retail chains. These additional investments in auxiliary businesses resulted in a relatively slow 5-10 percent poultry production growth.

Growth perspectives will continue to be dependent on availability of new markets for Ukrainian poultry. So far the industry has relied almost exclusively on domestic consumers who continued to increase poultry consumption due to shortage of disposable incomes or other arguments (healthier white meat, ease of cooking).

Due to the rather limited number of industry players and public nature of many of them poultry production forecast can be good. A long-term forecast can be built on company-by-company basis.

Myronivsky Hliboproduct LLC (commonly known as MHP) became a public company in 2008. Currently MHP intensively invests in its core business, poultry production and processing, through massive investments into new production facilities situated in Central Ukraine. At the same time it is continuing investments into vertical integration (tripling crop area since 2008), processing, and marketing.

The second largest Ukrainian poultry producer, Complex Agromars, is a privately owned company; thus information on it is rather limited. However, there are public statements made by management on future expansion plans. Agromars plans to increase poultry production to 300,000 tons, reaching MHP’s current scale. Similarly to MHP, the company is actively investing into vertical integration. As of today Agromars does not massively invest into big poultry semiprepared production facilities limiting output to existing demand.

Activity of smaller producers: Ptahocombinat Dniprovsky, Agro- Oven Corp., Volodymyr-Volynsk Ptahofabryka and others will remain to be limited to regions where their production is located. Some bigger producers in this group will be rather flexible due recent investments into production facilities. Similarly to bigger companies, these producers invest into crops and combined feed production to benefit from vertical integration.

Between 2013 and 2022, Ukraine’s poultry production is forecast to grow 21%, from 820 thousand metric tons (TMT) to an estimated 990 TMT. Over this period, imports are expected to fall 54%, from 85 TMT in 2013 to 39 TMT in 2022. Poultry meat exports are expected to increase 74%, growing from 50 TMT to 87 TMT. In 2016 increasing exports will exceed declining imports making Ukraine a net poultry meat exporter.

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