Russia’s poultry industry, once a story of consistent growth and self-sufficiency, is facing a severe downturn. The sector is grappling with a 2.6% drop in production in the first quarter of 2026, a halving of net profits in 2025 to 15.7 billion rubles (approximately $210 million), and a surge of cheap imports that are reshaping the market. After a period of stagnation, the industry is in a state of flux, with pressures on prices and profit margins threatening long-term investment and stability.
A Market in Decline: Production and Profitability
The first quarter of 2026 was a particularly difficult period, with production falling 2.6% compared to the same period in 2025. This decline was not uniform across the country; key producing regions such as Leningrad, Stavropol, and Tambov experienced even more significant drops. The drop in production signals a fundamental problem, with the market described as “oversaturated” after years of production exceeding demand.
The core issue is a collapse in profitability. In 2025, the industry’s net profit fell by 50% to just $210 million. By early 2026, many producers were operating with near-zero profitability, well below the optimal 15% margin. As of mid-2026, sector profitability has fallen further to 6-7%. The causes of this squeeze are manifold:
- Rising Costs: Producers are dealing with increased costs for feed, logistics, fuel, veterinary services, and debt servicing.
- Oversupply: Years of production growth have outpaced domestic demand, leading to price wars that have driven margins to critical lows.
- Retail Price Caps: Strict requirements from retailers have limited the ability of producers to pass on rising costs to consumers.
In response, producers are taking drastic measures. In June 2026, the number of birds in agricultural organizations fell by 1.3% year-on-year. This reduction in livestock is beginning to feed through to wholesale prices, which saw a recovery in late June and July. In mid-July, the wholesale price of a broiler carcass reached significant levels, showing a substantial year-on-year increase.
The Chinese Import Disruption
The domestic crisis is being exacerbated by a sharp increase in poultry imports from China. In 2025, Russia imported around 110,000 tonnes of poultry meat from China, a figure that is projected to rise significantly in 2026 if the pace of growth continues.
The surge in imports is driven by the significant strengthening of the Russian ruble, which appreciated considerably in 2025, making foreign meat more affordable. Chinese poultry products, particularly chicken fillets, are highly competitive on price, reportedly being significantly cheaper than domestic alternatives. Initially used primarily in the meat-processing industry, these cheap imports are increasingly appearing on grocery store shelves in major cities like Moscow and St. Petersburg.
While Russia has protective measures in place, the low cost of Chinese chicken makes them largely ineffective. This influx is putting further downward pressure on domestic prices, with the situation threatening to push poultry and pork prices down significantly in 2026. The National Meat Association has noted that many poultry farmers ended the first quarter with zero profitability, and the continuing rise in costs and price pressure suggests the financial performance for the full year could be notably worse.
A Two-Way Trade Relationship
The dynamic with China is a complex one, as Russia is also a significant exporter to the Chinese market. In 2025, Russia was the second-largest poultry exporter to China, behind Brazil, selling hundreds of millions of dollars worth of poultry meat and by-products, an increase from the previous year.
A critical factor here is the nature of the products being exported. Russia’s shipments to China consist largely of products like poultry feet and other by-products that are highly valued in China but have limited demand on the Russian domestic market. This symbiotic trade provides a vital source of additional revenue for Russian producers but does little to alleviate the price pressure from cheap fillet imports.
Outlook and Challenges
Looking ahead, the industry faces a number of challenges, including the continued risk of epizootic outbreaks, ongoing cost pressures, and limited consumer purchasing power. The outlook for poultry exports in 2026 is considered pessimistic due to both the strong ruble and a negative epizootic situation in some regions, further constraining producers. However, there are some glimmers of hope. The market turbulence in the Middle East is offering extremely favorable prices, and Russian companies could potentially capitalize on this to support their export revenue. Other key opportunities for the sector’s recovery include the development of deep meat processing, import substitution of veterinary drugs and genetics, and improvements in feeding efficiency.
For now, the Russian poultry industry is in a state of painful adjustment, caught between domestic overproduction, rising costs, and the disruptive force of cheap Chinese imports.
