Rising fuel and feed costs squeeze Russian poultry producers

 

Russia's poultry industry has entered an unexpected downturn, with rising fuel costs – likely reflecting the country's broader fuel supply disruptions – adding to mounting pressure from expensive feed, logistics and borrowing, according to the state business publication

Russian poultry meat production fell by 2.1% year on year in the first 5 months of 2026 to 2.76 million tonnes live weight, the publication said, citing official data from 

Producers and market analysts say weakening profitability lies behind the slowdown.

According to the National Meat Association, profitability across the poultry sector declined by around 1.5 times in 2025, leaving many producers with reduced working capital. Faced with high financing costs, some poultry farms have cut production and delayed expansion plans.

A spokesperson for GAP Resurs, Russia's second-largest poultry producer, said the industry has been grappling with higher transport and logistics costs, rising prices for key production inputs and additional expenses resulting from changes to regulatory requirements.

Rising fuel prices add pressure
Higher transport costs, together with soaring fuel prices, are frequently cited as key reasons for declining profitability in 2026.

The rise in fuel costs comes as Russia grapples with an increasingly severe fuel shortage triggered by months of Ukrainian drone strikes on oil refineries, fuel depots and export terminals. The attacks have knocked out a significant share of the country's refining capacity, forcing the government to impose fuel rationing in some regions.

According to Ekaterina Kosareva, managing partner at consultancy BMT Consult, rising motor fuel costs have been one of the key factors eroding the sector's profitability, alongside escalating feed prices and higher taxes.

Bird flu adds to production losses
Biological risks have also weighed on production, according to Artem Suvorov, head of consumer and agribusiness projects at consultancy Strategy Partners.

Earlier this year, Russia's veterinary watchdog reported outbreaks of highly pathogenic avian influenza in the Krasnodar and Rostov regions, forcing producers to cull part of their poultry flocks, Suvorov said.

Gradual recovery expected
Despite the challenges, industry analysts believe Russian poultry production could gradually stabilise in the second half of 2026.

According to Suvorov, rising wholesale chicken prices in recent months 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. Despite poultry's relatively short production cycle, producers remain constrained by high feed costs, the risk of disease outbreaks and elevated borrowing costs, limiting their ability to ramp up production quickly.