“Feed price has gone down lately, but is still high. All we hope for now is to see a good grain harvest and rain. Wheat price should be lower than last year, 0.6-0.7 lei (EUR0.14-EUR0.16) per kilo (RON600 to RON700 per ton),” says Puiu Ilisei, chairman of EuroAvi, a company with EUR23 million revenue last year, which expects flat revenue in 2013.
Changes in grain prices make a direct impact on the meat processing business, as livestock feed accounts for 70% of the cost of the poultry that reaches stores.
Poultry farming and processing businesses had to revise their profit expectations downwards last year after grain prices surged by 30% to 40% because of the poor harvest.
This year’s grain harvest is expected to be 15% to 20% higher and prices are already going down. Fodder corn price is now 16% lower than it was eight months ago, while feed wheat is now 1.6% cheaper.
EuroAvi chairman says consumption did not show any significant signs of rebound in the first four months of the year and the group’s slaughterhouse continues to work at 30% less than the maximum capacity.
“The first few months of the year are traditionally slower and then came the Lent and people did not eat too much meat. We now hope for the lamb season to end and people to shift to eating chicken.”
As the consumption did not increase and the market was flat, EuroAvi put on hold major investment projects as early as last year, choosing to focus on repaying a loan it took for its slaughterhouse seven years ago.
(English version by Loredana Fratila-Cristescu)