How the War in Ukraine Changed the Meat Industry Labor Market

In the second year of the ongoing war, Gremi Personal's clients already know they cannot count on workers "on demand" — those who, before the war, were practically available from one day to the next. We are talking about the pool of people from countries covered by the eased employment procedures under the Act on Foreigners of January 2022 — namely citizens of Ukraine, but also Armenia, Belarus, Georgia, and Russia. The pool of available male workers has dried up, while women who fled the war in Ukraine are now looking for employment. And women from Ukraine are excellent workers in this industry — which demands great concentration, cleanliness, and shift work — says Tomasz Bogdevic, General Manager of Gremi Personal. — Meanwhile, Gremi Personal has turned to blue-collar workers from former Soviet republics: Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan. For these nationalities, Poland has become a natural destination for labor migration.

The market abhors a vacuum

The meat industry suffered from the loss of the Russian market, but quickly found alternative markets — such as Asian markets with growing GDP, as well as Bangladesh and the Philippines. The value of Polish meat exports in 2022 amounted to €9.6 billion. Despite continuously rising production costs, it remains one of the most profitable branches of the processing industry. The sector is constantly developing, with new technologies emerging — not only in processing, but also in animal husbandry.

Meat exports have a very significant impact on Poland's trade balance, generating as much as €4.8 billion in surplus in overall foreign trade. Over 70% of Polish meat goes to EU member states, primarily Germany.

Poland currently uses three export gateways: Saudi Arabia, Hong Kong, and Singapore. From there, Polish meat is sold on to China and the Persian Gulf. There is certainly great potential in expanding into new markets and reaching a greater number of countries.

Poland is home to the most modern poultry farms in Europe, so Polish poultry is of high quality and its production is relatively inexpensive. This is one of the reasons why Poland exports over 1 million tonnes of poultry per year.

The growth in meat production is driven by the global increase in meat consumption. It is estimated that by 2029, consumption will grow by another 40 million tonnes, reaching 366 million tonnes per year. This trend is also visible in Poland, which over the past 20 years has become one of the largest meat producers in Europe. Today, it ranks first in the EU in poultry production, and fourth and seventh respectively in pork and beef production. Over the past two decades, production of these three main types of livestock in Poland has grown by 75% — according to the "Meat Atlas 2022" report. Poles also consume significantly more meat than fish. Among meat types, consumption of red meat is declining while that of white meat — poultry — is increasing.

Year after year, feed crop cultivation and animal production are undergoing changes that contribute to reducing greenhouse gas emissions. This is a lengthy process spanning many years — it requires moving away from industrial cultivation, rearing, and breeding techniques, as well as prioritizing local production and shortening supply chains.

The success of transforming the current meat production and consumption system also depends on policy — and not only at the national level. EU-level regulations and international trade policy play a decisive role. Globalization and trade liberalization are contributing to the global growth of animal production.

Workers still needed

Despite the progressive automation of production lines, the meat industry will need manual labor for a long time to come. Poles who choose physical work go abroad, so the natural migration step is to replace them with workers of other nationalities. Until recently, these were mainly Ukrainians and Belarusians; today, workers from countries as far away as Peru and Bolivia are increasingly found in Polish processing plants. Gremi Personal is already sourcing workers from distant regions, taking on the matter of permits and all related formalities. We also ensure that new workers — despite cultural and language barriers — quickly find their footing in a new job, providing them with strong support from the outset, such as foremen who speak English. These changes are very evident. According to our data, only 22% of workers in meat processing plants are now Polish, 60% are Ukrainian, and the rest are citizens of other countries — recently, for example, from Peru and Colombia. It can be expected that the recent visa scandal will temporarily delay the arrival of workers from Asian countries, but in the longer term, the Polish labor market will have to open up further to foreign workers. The composition of the workforce is also changing: 70% of workers in these plants are now women, and only 30% are men. You can find out more about the sweeping changes on the Polish labor market in our article on this topic. [link]

One of the challenges in the meat industry is high employee turnover and a shortage of workers. Meat processing is associated with physical strength, although the sector is increasingly technology-driven — so that working there now mainly requires training in the use of the relevant equipment.

— Agencies like Gremi Personal can help the meat industry, — predicts Damian Guzman, Deputy General Manager for Development at Gremi Personal. — This industry faces so many challenges that entrusting companies like ours with staffing matters will allow plant management to focus more on day-to-day challenges and production line planning, leaving personnel matters and related logistics to us. We provide workers with valid sanitary health booklets, ready to start work. In the meat industry, safety and product quality are among the most important issues. That is why we supply reliable labor.

Trouble on the horizon

Galloping inflation and the global crisis are hurting every branch of business. Meat production has become less profitable at every stage since the crisis triggered by disruptions in the supply of carbon dioxide. Everyone is feeling the pain: livestock farmers, slaughterhouses, as well as meat and cold cut producers. Once associated with luxury, meat today is relatively cheap. This is the result of mass farming and the primacy of profit over quality. Some consumers have started looking for artisan products from small workshops. That is why educating livestock farmers and adhering to guidelines and recommendations — as well as coping with rising veterinary inspection fees — is so important.

Electricity, gas, paper, packaging film, and transport are becoming tens of percent more expensive. The most pressing issue is the rise in feed prices. There is no doubt that the meat industry is facing many challenges. In economics, crises and inflation are natural — that is how the economy works — but a good business always has a strategy to minimize losses. That is why many companies see cooperation with agencies such as Gremi Personal as a safe solution that proves its worth even in difficult times.

Climate activists and doctors are already calling for a reduction in meat consumption, especially red meat — this will increase the production and consumption of so-called white meat, i.e., poultry.

Cage farming will soon be banned across the entire EU (from 2027). The industry should already be planning its corporate restructuring process. Since most of the changes in the sector are systemic, entrepreneurs are waiting for state support. In a position presented by the Union of Producers and Employers of the Meat Industry, the Polish meat industry set out its expectations of the government — including the possibility of co-financing investments in renewable energy sources using state budget funds. A large part of the industry already uses such solutions, but their wider adoption and state co-financing would make plants energy-independent, at least partially offsetting the rising prices of other energy carriers.

— The shift from global meat consumption to plant-based food is not a matter of years, but of decades — so fundamentally nothing will change in the nearest decades. In my opinion, entrepreneurs will turn to renewable energy sooner than they will turn to soy production. And they will more likely farm poultry — even cage-free — because it is a dynamic branch of meat processing. And the war in Ukraine has shown how quickly the economic and political situation can change worldwide, and that entrepreneurs must constantly face new challenges — first the pandemic, now the consequences of the war, which affect all of us: inflation, rising gas and energy prices.

By entrusting companies like Gremi Personal — at least with matters of employment, worker recruitment, and all the related legal and HR logistics — entrepreneurs leave this to us and can focus on generating profits rather than simply counting losses. — concludes Evgenij Kirichenko, founder and CEO of Gremi Personal.

Why is cooperation with employment agencies like Gremi Personal the best solution? Because we take on the full burden of recruitment and employment, supplying workers only when they are truly needed. Outsourcing with Gremi Personal works like this: when our Client needs fewer workers at any given moment, we find them other work — and all the formalities and documents related to any changes are our responsibility.

Find out more about our outsourcing service! https://gremi-personal.com/oferta/