Russian beef production to fall again

by Editor
Tuesday, April 01, 2008

A 12-year decline in Russian beef production has limited the availability of beef in the Russian market.

The United States Department of Agriculture (USDA) reported that, as a result, beef prices have spiked and the Russian government has been forced to lift a meat ban on Poland and look to Latin America to source higher volumes of product.

Russian beef production fell 4% year-on-year during 2007 as poor cattle husbandry, low feed stocks, high grain prices and general negative returns hampered investment in the area. The USDA has forecast beef production to decline a further 3.5%, to 1.3 million tons cwt in 2008 – in line with a forecast 3.5% fall in cattle inventories (to 18.4 million head).

The USDA anticipates Russian beef consumption to remain flat in 2008, at around 2.5 million tons cwt, as the steady increase in beef and pork prices continues to dampen red meat consumption.

According to the USDA, Russian frozen beef imports increased 25% during the first nine months of 2007 compared with the same period in 2006, to 488,000 tons. Of this total, 66% was imported from Brazil, 16% from Argentina and 8.5% from Paraguay, while Australian frozen beef contributed 1,145 tons.

Russia introduced a ban on Polish meat and plant products in 2005, reporting that Polish exports did not meet Russian food safety requirements. On 17 January 2008, the Russian Minister for Agriculture signed a memorandum to lift the ban. Polish meat exports to Russia are expected to reach 45,000 tons per year.