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Russian Federation: Livestock and Products: Annual Livestock Report 2008

by 5m Editor
1 September 2008, at 12:00am

USDA Foreign Agricultural Service GAIN Report by Erik Hansen, Mikhail Maksimenko and Cynthia Barmore. A link to the full report is provided. Pork production is expected to increase 7 per cent in 2009, largely due to growing investment in production, better reproductive performance, greater availability of investment credit subsidies and a high grain yield in 2008.

Report Highlights for Beef and Pork

Russia increased red meat imports 10.8 per cent during the first half of 2008 and is expected to increase domestic pork production in coming years. Beef production is expected to decrease two per cent in 2009.

Imports of live pigs for slaughter increased 30 per cent in the first quarter of 2008 as exporters sought to avoid import TRQ limitations. Pork production is expected to increase 7 per cent in 2009, largely due to growing investment in swine production, better reproductive performance, greater availability of investment credit subsidies and a high grain yield in 2008.

Livestock policies under the State Program for Development of Agriculture and Regulation of Food and Agricultural Markets in 2008-2012 encourage swine production and attempt to address Russia’s declining cattle numbers. Russia and the United States agreed on several new veterinary certificates for live animals and livestock genetics. Russia is in the process of amending its veterinary, phytosanitary, and sanitary regulations.

Executive Summary

Russia’s red meat imports increased 10.8 per cent during the first five months of 2008, up from 518,800 tons imported during the same period of 2007.1 Poultry imports increased 7.5 per cent during the first five months of 2008, up from 426,900 tons imported during the same period of 2007. Unless Russian meat and poultry import regulations change, over-quota imports are projected to increase in 2008 and 2009. Imports of live pigs for slaughter increased 30 per cent in the first quarter of 2008 as exporters sought to avoid import TRQ limitations. Supplies of live animals in Western Europe have been largely exhausted, and importers are turning to Australia, Canada, and now the U.S.

Pork production is expected to increase 7 per cent in 2009, largely due to growing investment in swine production, better reproductive yields, greater availability of investment credit subsidies, and a high grain yield in 2008. Livestock policies under the State Program for Development of Agriculture and Regulation of Food and Agricultural Markets in 2008-2012 encourage swine production and attempt to address Russia’s declining cattle numbers.

In May 2008 Russia and the United States agreed on several new veterinary certificates for livestock genetics, including for live cattle and bovine embryos. Appropriate Russian agencies changed food safety regulation for food additives, organic food, poultry chlorine treatment, and others.

Production

The Federal State Statistics Service (Rosstat) reported that as of July 1, 2008, there were 17.4 million hogs, one per cent fewer than in 2007. In 2007, the swine herd totaled 17.6 million hogs, a 9.9 per cent increase from 2006. In Russia, private plots generated 49 per cent of cattle, 43 per cent of swine, and 50 per cent of sheep and goats at the end of June 2008. Rising input prices significantly affect small Russian producers because private households have a limited ability to pass on higher costs to consumers.

Total profits in the Russian pork industry are falling, and competition is becoming fiercer. More profitable, vertically integrated companies are increasing their market share as they absorb less-efficient producers.

Falling grain prices will drive herd growth-potential, allowing farmers to increase their pig herds. Swine production is expected to increase 7 per cent to 44.4 million pigs in 2009. In 2008, swine production is expected to increase 7 per cent over the previous year due to unexpectedly high reproductive yields and an anticipated record grain yield.

Some meat market analysts predict that as new and modernized pig farming complexes reach planned capacity, pork production will grow 75 per cent from 2008 to 2012. Under the National Priority Projects, the Russian government hopes to increase annual domestic pork production to 2.4 million metric tons (MMT) by building multiple new pork production facilities. Domestic livestock production is currently cost-prohibitive due to unreasonably high production costs, feed conversion ratios and rising energy prices. This may change in 2008 as a record-setting grain yield results in lower feed prices. Lower input costs and higher meat prices may make pork production more costeffective.

According to Rosstat, Russia boosted production of basic food items in 2008. Processed meat production increased 18 per cent to 1.1 million tons from January to May 2008. Sausage production increased 8.6 per cent to 965,000 tons, and canned meat increased 13.5 per cent in the same period. Production of all processed meat and meat products increased 7.7 per cent in the first half of 2008 over the same period of 2007. Meat and offal processing increased 14 per cent, including a 0.5 per cent increase in pork, a 4 per cent decrease in beef and a 21.4 per cent increase in poultry. Production of semi-ready products increased 11 per cent, and sausage production increased 4 per cent.

Trade

Several organizations import live cattle, live hogs, semen and embryos under the National Priority Project in Agriculture. These include the State Agro-Industrial Leasing Company, Rosagroleasing (http://eng.rosagroleasing.ru/), Rosplem (ros-plem@mail.ru), Agroplemsoyuz (http://www.agroplemsoyuz.ru/), and several other companies. Supplies of live animals in Western Europe have been largely exhausted, and importers are turning to Australia, Canada and the U.S for imported swine genetics. Outdated Russian swine genetics offer a 4:1 feed conversion ratio and fat hogs that are unfit for processing. Western swine genetics offer better feed conversion ratios and leaner hogs.

1Data included in this report are not official USDA data. Official USDA data are available at http://www.fas.usda.gov/psdonlineonline.

Further Reading

- You can view the full report by clicking here.

Other Reports in this Series

To view our complete list of 2008 Livestock and Products Annual Reports covering pigs from USDA FAS GAIN, please click here

September 2008