Андрій Ярмак, економіст інвестиційного відділу ФАО

Ukrainian beef exports are not what they can be called. In the external markets, we supply veal, frozen half-carcasses, illiquid meat. The biggest prospects lie in the export of quality meat derived from grain fattening. And, as the calculations of the Food and Agriculture Organization of the United Nations (FAO) show, Ukraine’s potential is considerable $ 2 billion annually.

Where to start?

From fattening. In Ukraine, about a million bulls per year are born, there is a strong feed base. The only thing that is still lacking is the knowledge and experienced specialists. And this is not surprising since, over the past 25 years, cattle meat production has decreased by more than 5 times and is predominantly maintained on households. The production of meat in agricultural enterprises has decreased 19 times.

FAO has developed a business plan for intensive grain fattening of young cattle. Output: Feed 3,500 bulls to 550 kilograms live weight in 15 months. To implement such a project, $ 3.4 million will be needed, and investments will be repaid after 8.5 years.

Another business plan is the calculations for organizing the processing of such a quantity of meat. Investments in slaughter and collapse will already be $ 6 million but will bring it to the business owner a lot.

WORLD IMPORTS OF BEEF ANNOUNCES FOR $ 2 BILLION a YEAR

No matter, where to sell. Worldwide beef imports are growing by $ 2 billion each year. This figure is equivalent to the full potential of Ukraine.

Sales markets

Concerning specific markets, it is worth paying attention to the countries of the Middle East and North Africa (BSPA). If world imports grow by 8% each year, then in the Arab world it will be 22%. Residents of the region spend $ 250 million a year on beef.

In the Middle East, we have two types of potential consumers at once. The first is rich countries that need premium marble steaks. The second is poor countries that can buy the cheapest products. Interestingly, our main competitors in the BISA market are Brazil, India, the USA, Paraguay. They are located 10 thousand kilometers further from these markets than Ukraine. This is our huge logistical advantage.

The next direction of export is the European Union. For the time being, it is closed to us, and poultry farmers have tried to get on European counters for almost 7 years. But beef is the only type of meat for which there is a shortage in the EU, and this deficit will gradually increase. Europe itself is interested in buying our meat.

Take a look at China. We can deliver products there right now, with the Chinese market 20% bigger than BSPA. China buys meat and offal. There we can sell almost everything left of the cow.  

Our very long perspective – Japan, here is the most expensive beef in the world.

EXTERNAL MARKET REQUIRES  DEEP PROCESSING PRODUCTS

The possibilities for export cannot be counted. However, what is important is that the external market needs deep-processed products packed in a vacuum that mature “on the road.” Nobody needs frozen carcase-sides, except Russia.

Prices and volumes

The supply of chilled products is stimulated and the price is $ 3.5 / kg instead of the usual Ukrainian $ 1.5. But to earn these $ 3.5, you need to load the container daily. It is up to 55 thousand heads in live weight 550-700 kg.

beef EXPORT IS THE LARGEST AND ABSOLUTELY FREE INVESTMENT NICHE

In fact, now export of beef is the largest and completely free investment niche. However, only the right implementation of this opportunity is effective grain feeding, professional marketing, large-scale and deep processing. All this will give an export figure of $ 2 billion over the next 4-5 years.

Meanwhile, domestic business is satisfied with exports, which barely reaches $ 100 million. We do not have a strong meat lobby, and cooperation legislation still needs to be improved.

COOPERATIVE MODEL IS THE LARGEST FOR THE DEVELOPMENT OF BEEF MARKET

By the way, the cooperative model is the most appropriate for the development of the beef market, since more than 50% of dairy cattle belong to non-profit producers – households.

*This text is part of the Ukrainian Beef Congress speech

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