Russia’s poultry industry, long a success story of import substitution and agricultural modernization, has entered its most challenging period in years. After two decades of near-continuous growth, production is declining, profitability has collapsed, and the sector faces a combination of structural pressures that are forcing even the largest players to retrench. The causes are multiple: a surge in cheap Chinese imports, rising fuel and feed costs, high interest rates, disease outbreaks, and a domestic market that is effectively saturated.
From Growth Engine to Trouble Zone
For years, poultry was the most dynamic segment of Russian agriculture. Production grew steadily, domestic self-sufficiency exceeded 100%, and chicken became the country’s most consumed meat by a wide margin—accounting for roughly 69% of retail meat sales in volume terms in 2025. The industry’s expansion was driven by state support, favorable credit conditions, and a focus on replacing imported meat.
That trajectory has now reversed. In the first five months of 2026, poultry meat production fell 2.1% year-on-year to 2.76 million tonnes live weight, with the decline accelerating to 4% in May and 5.8% in June. The first quarter alone saw a 2.7% drop. Leading producing regions recorded sharp declines: Tambov region fell 12.4%, Stavropol 10.5%, and Leningrad 9.8%.
The production cuts are a direct response to deteriorating economics. According to the National Meat Association, profitability across the sector declined by roughly 1.5 times in 2025, leaving many producers with reduced working capital. By the first half of 2026, average profitability had fallen to 6–7%, down from 8–9% in 2025 and 10–12% in 2024—well below the 15% considered optimal for the industry.
“Many poultry farmers ended the first quarter with zero profitability, while rising costs for electricity, logistics, and so on have not gone away,” said Sergey Yushin, chairman of the National Meat Association.
The Chinese Import Shock
One of the most significant pressures on Russian producers has come from an unexpected direction: China. Originally imported primarily for the meat-processing industry, cheap Chinese poultry breasts have increasingly moved onto grocery shelves across Russia. “Chinese chicken is already sold in Moscow and St. Petersburg,” Yushin noted.
The economics are compelling. Chinese poultry fillet is so inexpensive that even Russia’s protective import mechanism—which imposes an additional duty once a quota is reached—fails to blunt its appeal. For Russian consumers facing real income pressures, the price advantage is difficult to ignore. For domestic producers, it represents direct competition in a market that was once their undisputed domain.
A Saturated Domestic Market
The import challenge lands on an already saturated market. Russia’s poultry self-sufficiency has consistently exceeded 100%, meaning the domestic market is effectively full. Every additional tonne of production intensifies competition, and price wars have battered the economics of even efficient enterprises.
“Each additional tonne strengthens competition, and price wars hit the economics of enterprises,” said Dmitry Krasnov of Reksoft Consulting.
The overhang from 2025, when production grew 2.2% to 6.8 million tonnes, proved difficult to absorb. Excess supply pressured prices throughout last year, when wholesale chicken prices “were practically stagnant and failed to keep pace with inflation.” That pricing weakness, combined with rising costs, created the profitability squeeze that is now forcing production cuts.
Costs Rise on Multiple Fronts
The cost side of the equation has deteriorated across the board. Feed, logistics, fuel, veterinary measures, regulatory compliance, and debt servicing have all become more expensive.
Fuel costs have emerged as a particularly acute problem. The rise in fuel prices—likely reflecting Russia’s broader fuel supply disruptions following drone strikes on oil refineries and fuel depots—has added significantly to transport and logistics expenses. The government has imposed fuel rationing in some regions, compounding the operational challenges for producers.
High interest rates have made credit prohibitively expensive for an industry that requires significant working capital. The Central Bank’s tight monetary policy has made loans “unprofitable for poultry farmers,” forcing companies to delay investment and cut costs.
Biological risks have added another layer of difficulty. Outbreaks of highly pathogenic avian influenza in the Krasnodar and Rostov regions earlier this year forced producers to cull part of their flocks, reducing output and adding to production losses.
The Industry Response: Retrenchment and Optimization
Faced with these pressures, Russia’s largest poultry producers have moved into cost-cutting mode. The “Resurs” group, the country’s second-largest producer, cut administrative staff in May and effectively suspended new investment projects. Cherkizovo, the market leader, announced a program to optimize commercial and administrative expenses, including personnel reductions, and reduced investments. The Agrokcomplex imeni N.I. Tkacheva, owned by former Agriculture Minister Alexander Tkachev, reported a net loss of 13.1 billion rubles for 2025—its first since at least 2019—and cut staff by 5% while more than halving capital investments.
The Agriculture Ministry has publicly maintained that the situation is stable and that production volumes are sufficient to meet domestic demand. According to Rosstat data, agricultural organizations produced 2.76 million tonnes of poultry in live weight in January–May 2026. The Ministry noted that producer prices for chicken meat rose only 3.3% year-on-year, “substantially below inflation.”
But the Ministry also acknowledged that “one of the key challenges for poultry farming in recent years is the rise in costs associated with increased expenses for production components, more expensive credit resources, and other factors.”
Prices Begin to Adjust
As production cuts take effect, wholesale prices have begun to rise. By mid-June, the wholesale price for broiler carcasses reached 200 rubles per kilogram, up 10% year-on-year. By September, broiler carcass purchase prices averaged 225 rubles per kilogram, up 18% year-on-year. Fillet prices rose even more sharply—25% year-on-year by mid-June.
Retail prices have followed, though more moderately. In August 2026, retail chicken prices rose 15.8% year-on-year, accelerating from 5% in June. The Agriculture Ministry attributed the increase to “a correction following an extended period of relatively low prices, as accumulated production costs catch up.”
The price recovery is beginning to improve producer economics. According to Artem Suvorov of Strategy Partners, rising wholesale chicken prices “have already improved the financial position of poultry producers and could encourage a recovery in output.” However, he cautioned that any rebound is likely to be gradual, constrained by high feed costs, disease risks, and elevated borrowing costs.
Export Ambitions Hit a Wall
The domestic difficulties have been compounded by a sharp deterioration in export performance. After years of steady growth, Russian poultry exports fell 26.3% year-on-year in January–May 2026 to 140,000 tonnes. Shipments to distant countries fell 28.6% to 100,000 tonnes, while exports to Eurasian Economic Union members declined 14.9% to 40,000 tonnes.
China accounted for most of the decline, with Russian poultry shipments falling from 70,000 tonnes to 37,000 tonnes in the same period. Chinese authorities have reportedly tightened requirements for Russian suppliers to protect domestic production, which has increased sharply. Kazakhstan, another key market, is pursuing an import-substitution program aimed at producing 210,000 tonnes of poultry annually.
Some producers have found opportunities in African markets. Ghana and Benin increased purchases severalfold in the first half of the year, though Krasnov noted these markets are “highly price-sensitive” and the value of products supplied is significantly below average.
The export slump casts doubt on Russia’s ambitious target of becoming one of the world’s leading poultry exporters by 2030. The government’s Agroexport agency had forecast exports exceeding 700,000 tonnes, worth around $1.5 billion, by that year. Current trends suggest that target is increasingly out of reach.
Outlook: Correction, Not Collapse
Industry analysts generally view the current downturn as a correction rather than a structural collapse. Albina Koryagina of Neo suggests the base scenario for 2026 is production growth of 0.5–1.5% by year-end. The Russian Poultry Union had forecast 1.2% production growth for 2026, though actual market conditions have cast doubt on that projection.
The fundamental strengths of the sector remain intact. Russia has substantial production capacity, a competitive market, and domestic self-sufficiency that exceeds 100%. The production cycle for poultry is relatively short, meaning supply can adjust more quickly than in other livestock sectors.
But the immediate challenges are real. High interest rates, elevated feed and fuel costs, disease risks, and the competitive pressure from Chinese imports are unlikely to disappear quickly. For an industry accustomed to growth, the coming period will require a different mindset—one focused on efficiency, cost control, and finding new markets rather than simply expanding output. The era of easy expansion is over; the test now is whether Russia’s poultry producers can adapt to a more difficult and competitive reality.
