Genesus Global Market Report
Russia, January 2021
Simon Grey, General Manager Russia, CIS and Europe, Genesus Inc
Russian pig price is currently 103 Roubles ($1.40) per kg liveweight. This is in the 100 to 110 range that the price has been for some time. Higher feed prices have reduced profitability. Average costs are estimated to be in the early 90’s. The large integrated companies will be lower.
A large proportion of production is in the hands of fully integrated companies. These produce a lot, if not all of their own major feed raw materials. This is in grain stores and in principle there at cost of production for the holding company. From a cash point of view these companies can operate with lower pig price. Farms that buy their feed do not have this advantage.
In November and December nearly 500,000 pigs were destroyed in Russia, due to ASF about 3% of the total population. At the same time new farms continue to be built and stocked. Russia continues its march to be a next exporter of pig meat. This will inevitably mean lower pig prices.
Genesus put a lot of focus on increasing pork sales with better tasting pork. The taste comes from increased levels of intramuscular fat. This means fatter pigs. Conventional wisdom is fatter pigs are more expensive to produce because they will have a higher FCR.
Many Russian companies have an obsession with FCR and wrongly assume that it is the vital figure when it comes to cost and having the lowest FCR is vital. As there are lower pig price and more expensive feed in Russia today FCR is more important than ever.
I often get asked what I consider to be one of the most stupid questions of all time, “what is your FCR ?”. From what weight to what weight, gilts and barrows or gilts and boars, what feed raw materials do you use, meal or pellets, particle size, what type of feeders, wet or dry feed, health status. These are all factors that affect the number we call FCR!
To explain further. Which is the best finisher FCR 2.6 or 2.7 of course 2.6! Now, which is the best. 2.6 FCR and $225 per tonne or 2.7 FCR and $215 per tonne. Now it is 2.7!
I imagine many who are reading this are saying of course that answer depends upon growth rate, slaughter weight, mortality etc. Exactly my point and why FCR as a stand-alone number is such a bad number to use!
Genesus now use margin over feed. As finisher feed is the only real variable cost in pig production, margin over feed is very closely related to profit. Margin over feed takes into account feed raw material cost, feed intake, growth rate, mortality, and carcass value.
Genesus genetic program is focused on producing the tastiest pork and maximising profit.
Tasty pork because why wouldn’t you? The only way to grow our business is to sell more pork! Making it taste better certainly seems a good idea.
Maximising profit. No real need to comment. Our genetic program looks at the whole, rather than focus on misleading individual traits like FCR!