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USMEF Report Identifies Opportunities For U.S. Pork In Russia

by 5m Editor
25 January 2007, at 9:53am

US - Significant opportunities for U.S. pork exist in the Russia market, according to a new report from the U.S. Meat Export Federation (USMEF), which also identifies what the pork industry can do to capitalize on them.

The report was funded by the Illinois Soybean Association, and the research team was led by USMEF Director of Central & South America and Global Strategic Coordination Ricardo Vernazza-Paganini.

According to the report, called the Russian Pork Market: Benchmarking the Competition, demand in Russia is expanding due to a growing disposable income and expansion of the modern retail and foodservice sectors. U.S. pork exports do face challenges, however, because there is significant competition from Brazil and the European Union, a growing domestic pork industry and Russian pork quotas are expected to be eliminated in 2009.

Brazil represented 51 percent of Russian pork imports in 2005, up from just 5.3 percent in 2000. Competition from other countries is also significant. In 1960 there were 85 countries that exported pork, while in 2005 that number had jumped to 130.

Domestic pork production in Russia is expected to grow by 21 percent over the next 10 years, the report notes, while imports aren’t expected to show significant growth. This will create an even greater squeeze on U.S. exports to the Russian market.

Last year the Russian pork market was the sixth largest market for the U.S., accounting for about 2.4 percent of total U.S. pork exports. These exports were valued at about $72.3 million.

Specific actions could be taken by U.S. companies to capture more of the Russian pork market, the report said. Expansion of the customer base into retail and hotel restaurants is one, with elimination of the carcass-by-carcass trichina testing requirement under the Russian WTO Accession Agreement helping to expand opportunities in both segments.

Expanding product lines to include items of more interest to Russian customers is another option. While the report recognizes the scale economies and labor costs associated with product customization, it suggests movement in that direction would be needed for the U.S. industry to remain competitive in the Russian market.

The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, lamb, corn, sorghum and soybean checkoff programs.

ThePigSite News Desk

5m Editor