January 15, 2010

US pork faces hurdles in Russia in 2010

Imports of red meat are not only down a quarter from the halfway point last year, but the US has also lost considerable market share.

Pork imports are forecast at 750,000 tonnes in 2010, flat from 2009. This reflects Russia's persistence to provide protection to its swine industry from competition and draw nearer to self-sufficiency targets.

US pork quota is approaching the danger zone of not filling in 2009 if strong second half sales do not emerge quickly. Concerns on potential future plant restrictions, Russian recognition of the currently valid pork certificate, and increasing US pork prices are potential hurdles to pass.

Unlike most countries in the world, in Russia, prices for food - especially meat - have increased since the onset of the economic crisis. According to the Ministry of Agriculture, prices for meat in the Russian market grew through the entire chain – production, processing and retail - from July 2008 to June 2009. Prices are expected to continue to grow in 2010.

Falling incomes and growing food prices will decrease Russian meat consumption. The National Meat Association of Russia reported that if poultry prices continue to rise, consumers are more likely to increase consumption of non-meat products rather than switch back to beef and pork at current prices. Production of ready meat products will continue to decrease in 2010.