How Ukrainian grain made Polish livestock farmers rich

In 2022, cheap feedstock from Ukraine allowed Poland to reverse the long-term decline in the meat industry.

Polish farmers have so increased purchases of purebred young pigs in Germany, Denmark, and the Netherlands that piglet prices in Europe have doubled.

That is why the ban on Ukrainian grain imports will lead the Polish meat industry to a crisis and hit the pockets of Europe’s leading breeding companies.

In April, German purebred piglets cost more than 100 euros per head, more than twice as much as a year ago. And the Poles are not only buying piglets all over Europe but have also become leaders in chicken exports.

All that is because Polish farmers have got a new resource, namely low-priced Ukrainian wheat, corn, and soybeans, which they have used to increase their pig herds and develop chicken farms.

According to Poland’s agriculture and rural development ministry, last year’s exports of all types of meat and dairy products from the country increased by 37 percent.

A steak of hope

"Polish companies are intensively increasing the number of pigs, buying piglets in Germany, the Netherlands, and Denmark," says Mykola Babenko, executive director of the Ukrainian-based Meat Industry Association.

"As a result, prices for young animals have jumped from 45 to more than 100 euros per piglet over the year."

It seems that in 2022, Poland set a national record for piglet imports, having spent at least EUR 400 million.

"This was thanks to the import of cheap Ukrainian grain and protein crops, such as corn, wheat, soybeans, and sunflower, and their processed products to Poland," Mr Babenko adds.

As a result, Polish farmers have reversed the long-standing trend of reducing the number of pigs.

Notably, pork plays a central role in Polish gastronomy, with Kotlet Schabowy one of the country’s culinary trademarks.

That’s why the data published by Główny Urząd Statystyczny, Poland’s statistics bureau, revealing that in the second half of 2022 the number of pigs in the country increased to 9.6 million heads, was positive news on a national scale.

While the increase was minimal, about 0.1 percent, it was the first in several years.

A ‘phoenix’ chicken

Affordable grain from Ukraine was an incentive for the Polish poultry industry to take off last year.

According to Ukraine’s ministry of agrarian policy and food, chicken production in Poland increased by 8.2 percent in 2022.

Marek Budzisz, a Polish analyst, points out that Poland became one of the leading chichen exporters in the EU last year. This concerns Ukraine as well: In the first quarter of 2023, Poland sold four times more chicken to Ukraine than Ukraine sold to Poland.

And all Poles benefit from this.

Thus, chicken meat has risen in price in all EU countries, by an average of 11.2 percent year-on-year, with record prices in the countries where Ukrainian grain did not arrive. In the Czech Republic, the increase is by 26.5 percent; in Germany, by 17 percent. Conversely, in Poland, poultry prices decreased by 0.9 percent.

What's next

According to Ukrainian newspaper Dzerkalo Tyzhnia, prices for Ukrainian grain exports in 2022, including to Poland, were 40 percent lower than the global average wheat prices and 30 percent lower for corn.

This difference stimulated the development of the meat sector in Ukraine’s neighbouring country.

In Ukraine, the war caused a decline in both cattle (minus 300,000 head) and pigs (minus 400,000 head). According to the Meat Industry Association, the shortage of meat in Ukraine has increased to 30 percent of annual consumption due to a lack of supply.

Currently, pork in Ukraine is almost a third more expensive than in Poland: The average price of pork in Poland is UAH 150, while in Ukraine it is UAH 200.

Four crops – wheat, corn, rapeseed, and sunflower – are currently banned from export to Bulgaria, Hungary, Poland, Romania, and Slovakia until 5 June 2023.

This ban is likely to be extended, despite significant benefits for certain segments of the agricultural market. According to Mykhailo Nepran, first vice president of the Ukrainian Chamber of Commerce and Industry, Ukrainian grain exports to Europe "upset the balance in European agricultural markets"

Therefore, a return to last year's situation with dumped grain exports is unlikely.

"Now the transit will be strictly controlled – how much has entered and how much has left – under the supervision of Ukrainian and Polish customs officers until the grain consignment leaves Poland," Mr Nepran explains.

Regardless of whether the European commission lifts or extends the ban on exports of Ukrainian agricultural raw materials on 5 June, Ukraine needs to consistently develop its livestock industry, and Poland’s experience clearly demonstrates the prospects of this path. This will not only reduce imports of meat from abroad but also develop its exports.

In fact, it is about replacing grain exports with meat exports. In this case, the added value from the created production chain will strengthen Ukrainian and not foreign farmers.

Another aspect is the reduction of costs and risks in the course of supplying abroad. According to experts, meat exports require ten times less logistics capacity than grain exports.