For all Russians, last year’s collisions in the chicken egg market are memorable, a socially important product became more expensive and turned into a deficit. To avoid a repeat of an unpleasant situation, Galina Bobyleva, the General Director of the Russian Poultry Union, shared with aif.ru what needs to be done.
Russian poultry farmers in 2023 produced 46.1 billion chicken eggs, which is almost 2% more than the 2022 figure. At the same time, according to the Russian Poultry Union, domestic consumption amounts to 42.2 billion eggs. “Domestic producers have all the opportunities to meet domestic demand, there can be no talk of any deficit, we can always provide for internal consumption,” said Galina Bobyleva confidently.
Against this backdrop, last year’s dramatic events in the chicken egg market look doubly strange. Sales were restricted to 1-2 dozen per person in many regions, and the government, aiming to eliminate the deficit, allowed duty-free imports from friendly countries.
To protect Russians from sharp price increases in chicken eggs in the future and prevent empty shelves in stores with this product, the problem of the relationship between producers and retail chains must be resolved at the state level. “The main issue is the ability to enter into long-term contracts between poultry farms and retailers,” Bobyleva is convinced. “This will give poultry farmers confidence in the sale of their products for 1-3 years, which, in turn, will allow them to invest in development and acquire modern technologies. This will lead to increased production and help keep prices at least stable,” the expert emphasized.
Currently, retailers mainly purchase eggs from poultry farmers under one-time or short-term contracts. “The share of long-term contracts in the total sales structure is only 20%,” calculated Galina Bobyleva. “In these conditions, even a small increase in demand from consumers instantly affects the final cost. At the same time, producers cannot make a clear development plan, today they sold a batch, and whether a deal will be concluded tomorrow is unknown. Essentially, poultry farmers are forced to live day by day, but this strategy leads to market distortions in terms of supply volumes and price,” explained the expert.
Therefore, transitioning to long-term contracts could fundamentally reformat our market and protect it from shocks in the future. This would stabilize the industry, give impetus to development, allow networks to rhythmically receive batches of chicken eggs, and calm consumers. “With this approach, the optimal retail price for a dozen eggs will be 95-100 rubles,” calculated Galina Bobyleva. “This will allow producers to develop, and it will be quite acceptable for buyers. Even under current conditions, all participants should strive for this price level in 2024, but achieving it will be easier by changing the nature of the relationship between producers and retailers. Currently, retail chains, unfortunately, usually refuse long-term contracts, preferring to buy eggs under one-time agreements,” concluded Galina Bobyleva.