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Bulgaria Livestock and Products Annual 2006

by 5m Editor
17 September 2006, at 12:00am

By USDA, Foreign Agricultural Service - This article provides the pork industry data from the USDA FAS Livestock and Products Annual 2006 report for Bulgaria. A link to the full report is also provided. The full report includes all the tabular data which we have omitted from this article.

Report Highlights

The Bulgarian livestock industry continues to restructure in preparation for EU accession. Among the new challenges to the red meat sector are the classical swine fever eradication program, improved animal genetics and meeting food safety and quality standards. Growing consumption in 2005/2006 has stimulated higher beef imports. U.S. meat exporters may continue to export beef and pork to the local market until the end of 2006.

Executive Summary

Over CY2005 and in early 2006, Bulgarian livestock industry continued restructuring in preparation for the EU accession. The major challenges for livestock farms and the meat processing industry were related to active investment, improvement of animal breeds, and the introduction of EU harmonized food safety and animal health norms. The good grain crop in 2005 supported overall successful development of the livestock sector.

Most small and medium size farms, however, struggled to introduce EU veterinary requirements in the area of animal health and animal welfare, and some went out of business. In 2005, total number of livestock farms declined 7.5% with the number of small farms coming down by 15%-17%. Meat prices continued to increase as consumer demand continued to exceed supply, and stimulated slaughter by smaller farms. Thus, the reduction in livestock numbers continued due to industry restructuring and meat deficit issues, but the pace slowed.

As a result of the above trends, red meat production in 2005 was lower and meat imports continued to increase. Total 2005 red meat imports were 79,000 MT compared to 55,000 MT in 2004 or a growth of 44%, as beef imports alone were 209% higher and as beef substituted for pork. Pork imports, due to vague and unclear trade policy and protectionist measures, dropped to 21,000 MT. For the first six months of 2006, imports stayed high: beef at 27,000 MT, and pork at 17,000 MT, or total 44,000 MT. By 2007, with EU accession, meat imports are likely be significant; however, trade patterns may change: more pork will be sourced within the EU, and pork imports will likely increase and surpass declining beef imports.

According to U.S. Customs, in 2005, U.S. red meat exports to Bulgaria increased to 3,355 MT (2,662 MT in 2004). In 2006, (January-June), these exports were 2,117 MT or 64% growth over 2004.

A new challenge was the termination of vaccination against classical swine fever (CSF) which started January 1, 2006. To date, Bulgaria has had 3 officially announced CSF outbreaks, which has not led to any dramatic drop in swine numbers or pork production but has raised many issues related to correct implementation of the CSF eradication program and bleak industry hopes for exports (see BU6006).

In late 2005 and in 2006, the MinAg/Vet Service intensified its inspections in connection with the introduction of EU food safety standards at meat plants. The final EU food safety inspection, due in the fall of 2006, should verify and/or revise the list of locally-approved establishments, so that by January 2007 only those which have final EU approval will operate on the market. Currently, about 310 red meat facilities or 42% fewer than existed in two years ago, are assessed as ready to operate on the EU market.

Bulgaria still continues to allow entry of U.S. meat and meat products in 2006. The FAS Office of Agricultural Affairs negotiated a derogation form the current regulation (Ordinance #47 passed in May, 2006) which introduced EU requirements for third country imports such as approved establishments, export certificates etc. starting October 1, 2006. As a result, the U.S. will be able to use the current FSIS 9060-5 bilingual certificates to continue to export meat products to Bulgaria until December 31, 2006 (the last date on the certificate should be not later than December 31, 2006). Shipments will be allowed entry in the first two months of 2007.

The prospects for U.S. exports of higher quality beef steaks in 2007 are still good. This trade is in small quantities and sourced from EU approved plants in the U.S. U.S. exports of pork are likely to continue as well, most likely sourced from Smithfield’s EU-approved plants in the U.S. and traded via Romania/port of Constantza and indirectly coming to the local market. Due to upcoming EU accession, however, Bulgaria will not allow imports of U.S. poultry and products, and beef tripe, two major products in which the U.S. has been seen as traditionally competitive.

Thus, the potential loss of this market can be estimated at about $14 million. In 2006-2007, the livestock and meat industries are to continue with further restructuring related to investment in improved breeds; better meat quality; adoption of stringent hygiene practices and food safety standards; and development of new marketing strategies. Most likely results by 2007/2008 are fewer farms, stabilized livestock numbers, and improved efficiency and competitiveness of commercial operations.

EU accession challenges

There are several areas in the veterinary field which have been outlined by the EU experts as being of high concern in the last EU progress report of May 2006. The MinAg showed a commitment and put extra efforts to eliminate these “red flag” zones in the period after May, so that the next EU progress report due in October can register a considerable improvement.

Border veterinary control: out of 8 EU-model border points, only one has been fully completed in 2005. The work on the remaining 7 border point has been expedited and they should be ready by October 1, 2006. It is assumed that their certification will take 1-2 months, so that by January 1, 2007, all border points should be operational. These border points should be able to process all trade (imports and exports) in foods of animal origin with third countries, including USA.

Incinerators for the BSE specific risk materials (SRM), management of high and low risk materials. Bulgaria currently has only one industrial capacity incinerator which meets the EU requirements (Shoumen); and one (Varna) temporary approved to process SRM until the new EU-funded incinerator start working by 2009. This new incinerator funded by the EU is in process of being built and will be ready by 2008/2009. The new facility will be the largest on the Balkans and will be able to process SRM, high and low risk materials, from neighboring countries as well (Macedonia, Greece).

Since the beginning of 2006, incinerators can not sell the meat and bone meal due to the feed ban. The GOB used to pay to incinerators for burning of high and low risk materials but transferred this cost to me at establishments in 2006. Due to high transportation cost and high fees, many plants preferred to bury the waste. However, burying of such quantities carries a risk for human health and is not in line with the EU standards.

Further Information

To read the full report please click here (PDF format)

List of Articles in this series

To view our complete list of 2006 Livestock and Products Annual reports, please click here

September 2006