Kazakhstani farmers have outlined the factors that, in their view, shape the cost of beef production, and explained why current purchasing prices remain on the brink of profitability. Producers also shared their assessments of the current market situation and their forecasts regarding the dynamics of wholesale prices.
WHAT PRICES FARMERS ARE CITING
As reported by Digital Business, the director of AGROKESHEN BEK LLP and deputy director of the branch of the Association of Farmers of Kazakhstan, Kanat Mambetov, noted that there have been no sharp jumps in wholesale beef prices since the beginning of the year.
According to him, in the spring the farm was selling livestock at 1,800–1,900 tenge per kilogram of live weight, which corresponded to approximately 3,600–3,800 tenge per kilogram of meat.
Currently, according to the farmer, the purchase price in the markets of the East Kazakhstan Region (EKR) ranges from 2,500 to 3,400 tenge per kilogram of meat. These estimates are confirmed by the owner of the «Beken» farm, Temirlan Beken, who reported that large wholesale buyers are currently purchasing beef at an average of 3,000–3,200 tenge per kilogram.
WHAT MAKES UP THE COST
According to Kanat Mambetov, the main expenses are on feed and employee wages. In addition, the cost includes taxes, equipment depreciation, repairs, farm maintenance, and veterinary expenses.
The farmer noted that poor yields in the EKR have led to an increase in the cost of fodder preparation. According to him, the price of a bale of hay weighing 200 kg has increased from 8,000 to 12,000–15,000 tenge. Additional costs also arose due to the implementation of extra courses of animal treatment.
Temirlan Beken reported that fattening 100 bullocks over four months requires approximately 36 tonnes of barley. According to his calculations, just the purchase of grain costs more than 3.24 million tenge, and hay costs roughly another 2–2.5 million tenge.
WHAT INFLUENCES THE COST OF MEAT
Kanat Mambetov believes that one of the reasons for the high cost is the insufficient development of deep processing of livestock products. According to him, in Kazakhstan, a significant portion of raw materials is not used after slaughter, whereas in other countries a much larger volume of by-products is processed.
The farmer argues that if full-cycle processing plants existed, the cost of meat for the end consumer could be reduced by at least 10%.
HOW PRODUCERS ASSESS STATE SUPPORT
The publication's interlocutors view the existence of state support programmes positively, but note difficulties in accessing them. According to Kanat Mambetov, the current subsidy system provides higher payments for the purchase of imported breeding stock compared to domestic stock.
The farmers also believe that the paperwork required to obtain subsidies can be burdensome for small farms.
WHAT EXPECTATIONS FARMERS HAVE ARTICULATED
According to Temirlan Beken, the wholesale price of beef could exceed 4,000 tenge per kilogram in the future. He links this assessment to rising costs in the industry and the consolidation of producers.
CONTEXT
Earlier, Deputy Prime Minister – Minister of National Economy Serik Zhumangarin ordered a detailed analysis of the meat market due to the ongoing price increase.
At the same time, Vice-Minister of Agriculture Azat Sultanov stated that after the rise in lamb prices at the end of May, prices in a number of regions began to fall. He also acknowledged that the cost of meat was influenced not only by seasonal demand during the period of Kurban Ayt, but also by exports: according to him, Kazakhstani lamb is in high demand on foreign markets, which is reflected in domestic pricing.
