KZBlog

More About Meat and Food (Comments Off on More About Meat and Food)

Posted by KZBlog on 26 February 11 • Categorized as News • Tagged as business, customer service, food, inflation, meat, Supermarket, World food price crisis

Having just posted on importing cattle to solve some of the problems of the meat industry, I was perhaps particularly attentive to meat prices today at the supermarket. I was shocked that any kind of butchered meat, including stir-fry strips/beef stroganoff, gulash/stew meat, and steaks, now cost around 1800 tenge per kilogram (US$ 5.64 per pound). What is shocking is that only a few months ago, they cost 1400 tenge, a 30% increase. Equally shocking has been the growth in prices of what we might call lower-cost meat products, such as whole chickens or large unbutchered hunks of meat. Sausages (which contain flour, eggs, and presumably a lot of nasty meat by-products) are also significantly more expensive than they used to be.

I realize that there is a world food price crisis right now, but every since I arrived here 5 years ago there has been inflation in food prices at a rate visible to the consumer.

The government is taking measures to combat inflation in food prices (one participant at the meeting with Massimov told me that it was reported to the Prime Minister that potatoes from Pavlodar cost more in Pavlodar itself than they do in Almaty!). But they are mainly targeting food producers, and the food producers blame the stores. But of course the smaller stores and sellers at markets and bazaars feel that they can’t cut into their profits anymore.

Personally, I suspect that the speed with which prices grow indicates that it is the supermarkets that are to blame. Even if a producer or distributor hiked its prices, it would take time for that to trickle down to the consumer. However I’m not an economist. I do hope the government will conduct some detailed research into where the mark-ups on food is coming from.

The Ministry of Agriculture is also proposing government sales of food, for the state to stockpile food and sell it off at below-market prices. However this seems like a stop-gap measure at best. For it to be sustainable, the government would have to buy food at the same price they are selling it at, and that would ultimately hurt the food producers.

Frankly, it seems to me that inefficiency is a major problem. I was amazed today to watch a woman at the supermarket cutting up price tag signs from a sheet of A4 paper. And early on a weekend morning, when the store was practically empty, there were nevertheless 3 security guards standing at the cashiers, ready to watch over every purchase, if one happened to occur. Not to mention, all the counter women who are busy wrapping and labeling cheese and salads and meat-but won’t stop for 5 seconds to help a customer. In a lot of cases, the cheese or meat or whatever is already packaged, and labeled, but the customer still has to ask someone to give it to them because it’s closed away in a case.

If I were a businessman, I would certainly introduce the idea of shifts, hourly wages, and more self-service to Kazakhstani businesses.

And yes, I often don’t buy things because I have to wait for help. I also don’t buy a lot of meat anymore. Ironically, Kazakhstan has taught me to be a vegetarian.

US Meat Will Have to Do (3)

Posted by KZBlog on 24 February 11 • Categorized as News • Tagged as agriculture, cattle, Competitiveness, meat

I’ve been enjoying reading the news about a new program to import US and Canadian beef cattle to Kazakhstan in order to improve the stock here. One of the common stereotypes in Kazakhstan about the US is that American meat tastes awful while Kazakhstan meat is very good. Now I have a theory on this: Kazakhstani tend to eat their meat boiled, and cooked well done, whereas Americans tend to grill, fry or roast their meat and eat it a little bit pink. Americans also like their meat low-fat, whereas the average Kazakhstani enjoys fatty meat (One colleague once told me that buying meat without fat is like throwing your money into the wind). And good stew meat (for boiling) does tend to need a bit of fat. So if you boil low-fat meat (or boil a steak or something) of course it will taste bad.

But as it turns out, Kazakhstan has been facing a meat crisis for a while. And I’ve heard from sources in the Ministry of Agriculture that in fact a large percentage of meat in Kazakhstan is imported from the US. So in fact, we’ve been eating US meat for a few years now. So while I feel a bit vindicated that that Kazakhstan meat everyone praises is in fact US meat, I am glad, for the sake of ranchers, that Kazakhstan is choosing to import cows now.

This article from the Telegram, a Canadian newspaper, has way too much fun with cow puns and focuses on the airport in Canada that is acting as a half-way point. And this article from the Fort Francis local paper talks to some of the ranchers and why they are participating. Kazakhstan appears to be paying a good price to get these cattle ($1500-$1400 a head, instead of the market price of $1000-$1100), which is a good sign that this program is being well run.

But there was one interesting note:

Especially in Kazakhstan, the government’s mandate and support for importing the cattle comes, in part, as a way to increase employment.
“Depending on what time of year it is, we’ve got around 1,000 head of cattle kicking around [our ranch] (sic) and it takes one or two guys to do chores for three hours in the morning and that’s it,” [Kristi Guilford of Xports International] explained.
“Whereas over there, they’ll have 400-500 people that are there to feed their 2,000 head of cattle.”

If she’s right, Kazakhstan has a ways to go to increase its competitiveness and efficiency. 2 guys working for 3 hours to handle 1000 cattle in North America versus 400-500 people for 2000 cattle? That means the farms are seriously over-employing people (and presumably paying tiny wages or being forced to maintain a ridiculously high payroll that leaves the company unprofitable). And it likely means that management and possibly technology is not being implemented well.

And if you want to see a a great picture of the cows check out the AP article on it.