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USDA International Egg and Poultry

20 January 2015

USDA International Egg and Poultry - 20 January 2015USDA International Egg and Poultry - 20 January 2015

USDA International Egg and Poultry

The Kazakhstan Ministry of Agriculture issued a plan for the development of the poultry meat sector in Kazakhstan through the year 2020. USDA FAS issued the following gain report (KZ1410) containing an unofficial translation of the full plan. The plan reviews the current state of the sector, as of 2012, identifies the conditions necessary for development of the sector, the problems currently impeding the development of the sector and possible solutions. Below are excerpts from the unofficial translation by USDA FAS.

GOALS & OBJECTIVES. The main objective of the master plan is to increase poultry meat production in Kazakhstan. The master plan objective is to support sustainable development of poultry meat production and meet the following targets: growth in poultry meat per capita consumption from 18 kg to 21 kg and decrease poultry imports to 17%.

PRODUCTION CAPACITY. The current situation analysis shows that the maximum production potential of the existing plants in Kazakhstan is about 180,000 MT of poultry meat/year. Most of the growth in poultry meat production has taken place due to increased output among currently existing facilities. There is also a geographical imbalance of poultry meat production, with production concentrated in particular regions. This, combined with poor logistic infrastructure that is not able to connect production regions with other regions, creates conditions for spot overproduction. In this regard, enterprises must pay attention to developing their distribution network as this can become a constraining factor in increasing sales. This situation can also create conditions for hyper-competition within particular regions. An efficient distribution network facilitates transmission to meet consumer demand and helps iron out irregularities of the spatial distribution of production capacities.

PRODUCTION. Poultry meat production consists of industrial production carried out by agricultural enterprises as well as household production. According to the Statistics Agency of the Republic of Kazakhstan, poultry establishments produced 94% of 123,100 MT of poultry meat in 2012. According to the data provided by “Kazakhstan Poultry Producers Union” Association of Legal Entities, as of January 1, 2013, on the territory of the Republic of Kazakhstan there are: 28 poultry plants for table egg production (total capacity of 2.356 billion eggs in 2012), 18 poultry plants for meat production (total capacity of 116,000 MT of poultry meat in 2012), 1 parent stock multiplier farm for production of hatching eggs and day-old broiler chicks, 2 broiler parent stock farms for production of hatching eggs (total of 12.3 million eggs and 4.2 million day-old broiler chicks), 1 parent stock farm for production of duck hatching eggs, total of 2.345 million eggs, 5 layer parent stock farms for production of layer hatching eggs (total of 98.8 million eggs and 7,297 day-old chicks). Most of the broiler plants are located in the southern and eastern regions of the republic, while layer farms are located in the northern and in the central part of the republic. During the period 2005-2012, chicken numbers in the republic constantly grew in every farm category. There has been considerable progress in the poultry meat production sector in the recent years, dependence on poultry imports remains high.

IMPORTS. As the level of poultry meat consumption grows, import volumes increase as well. At the end of 2012, the republic imported 192,200 MT of poultry meat. The USA is the leading exporter of poultry meat, including 100,000 MT of poultry that were imported within the quota. It should be noted that the cost of poultry meat imported from the USA is lower than the cost of meat manufactured in Kazakhstan, even outside the quota. For instance, 1 ton of poultry meat produced in Kazakhstan costs 2,000 USD, while meat imported from the USA outside the quota costs 1,494 USD. The poultry meat market can be divided into 2 segments: frozen meat that also includes all of the imported meat and chilled meat.

There is a gradual upsurge in interest from consumers for fresh products, which is a positive factor for protection against dumping, and the need to compete with the cheap imported meat. Although the demand is growing, the culture of poultry meat consumption in Kazakhstan has not been well-developed. The share of fresh meat in domestic production is not high. In addition, it is critical to have a well-established distribution channel to market such products, due to their short shelf life. This requires certain investment efforts from producers to improve logistics of sales.

SUPPORT. The population of Kazakhstan is expected to grow to 18.7 million people by 2020. At the same time, taking into account the recent outlook and world trends of consumption growth, the poultry meat consumption index it likely to increase to 21 kg/person/year. The current consumption in the republic is 25 kg/person/year and expected to grow up to 32 kg/person/year.

Considering these estimates, by 2020 the Kazakhstan population could consume 336,000 – 400,000 MT of poultry meat annually. Given that on average the industrial enterprises operate at 80% of their peak capacity, it may be assumed that the total maximum production capacity must vary between 336,000 and 436,000 MT of poultry products per year. With the level of imports expected by 2020 (about 56,000 MT of poultry meat per year), the planned production output should amount to at least 250,000 MT of poultry meat annually.

Today, less than 50% of poultry meat is used for value-added processing in the republic, and the share of chilled products is about 9% of the total sales volumes. This is expected to reach at least 80% by 2020. To increase production capacity and cater to local markets, the meat chicken plants need to upgrade their kill rooms to install lines that meet modern workplace hygiene and environmental requirements.

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