Mudrak R., Muzyka B. Raw materials supply of Ukraine meat processing industry - the state and prospects of the development

Abstract

Agrarian crisis has determined severances of economic ties between agricultural and industrial commodity producers in many cases. Agrarians growing cattle are unable to cooperate with industrial enterprises by selling its products through alternative channels. On the other hand, meat processing plants try to solve its raw materials problems by importing relevant products. Such practice demonstrates unbalance of business mechanism of meat products subcomplex and failure to achieve parameters of its sustainable development.

Domestic meat processing industry considers import of livestock raw materials not just as an addition to basic supply on the part of domestic agricultural commodity producers which covers existing deficits and as adequate, irrespective of the situation on the domestic market, the supply chain. Such an approach contains business risks - it doesn't allow conducting long-term (strategic) planning and may be the reason of losses, business interruptions.

Conclusions: raw materials shortage, inter alia, is a limiting production growth factor in meat processing industry of Ukraine economy;sources of raw materials of meat processing industry is domestic production of appropriate agricultural products and import; meat processing enterprises tend to consider import of cattle-breeding raw materials as adequate, irrespective of the situation on the domestic market, the supply chain. Such an approach significantly increases business risks because: dynamics of absolute volumes import of cattle-breeding raw materials shows a higher level of instability in comparison with domestic supplies; the prices for imported products can show sharp increase in a short-term period as a result of exchange instability (devaluation) which will result in shocks from the suitable proposal; reconstruction of business relations of industrial and agricultural enterprises on a long-term basis is the condition of a stable growth of domestic meat processing industry.