The historically fastest rise in material prices is taking place

The rapid growth of all kinds of raw materials and resources will be reflected not only in the increase of producers’ costs, but also in the prices of products on store shelves, as a result of which consumption will decrease, which in turn will again affect local producers of meat products. Ieva Piteronoka-Krishane, the chairman of the board of SIA Cēsu ghalas kombinats, tells this in an interview with Dienas Biznesam. She emphasizes that in the current relatively rapid times of change, not only manufacturers, but also the state administration and politicians – the Cabinet of Ministers – must be able to react very quickly.

Excerpt from the interview

What is the current situation in the meat processing industry in general?

Today’s situation in the meat processing industry is very tense – there is the historically fastest rise in the prices of raw materials, constant increase in the prices of energy resources, limited availability of raw materials. The future estimates are not favorable for the consumer, they suggest that the price of meat products on store shelves will double this year alone. According to the increase in the price of cereals already last year, it was expected that the price of raw materials for the production of meat products – pork, poultry and beef – would also increase. The partially predicted price increase scenario came true. But then there was the Russian invasion of Ukraine, a country that produces a large proportion of grain products, including fodder, for the world market. And the price of pork on the European market literally jumped at a record pace within three weeks. The price increased so rapidly that in order to fulfill contractual obligations with retail chains and public sector institutions, meat processing companies make deliveries below cost, suffering significant losses for each delivered kilogram. At the same time, the increase in the price of beef was more moderate – more predictable. A constant price increase has been happening every week since the beginning of the year. Read on: