August 19, 2009

US to increase beef exports to Russia; obstacles in the way

US beef producers are hoping to increase exports to Russia, but competition from South American producers and sanitary issues may prove to be stumbling blocks.

Russia's Federal Service for Veterinary and Phytosanitary Oversight have warned that it may suspend beef imports from 15 US companies, as they did not submit data on the beef's compliance to Russian standards.

South American meat production is also growing, and they are 18- to 20-percent cheaper than US meat.

For the first five months of 2009, US beef exports to Russia increased 22 percent in physical terms but dropped 46 percent in value.

The US intends to strengthen its position in the Russian beef market by increasing the supply of manufacturing beef, a market segment that is currently dominated by Brazilian beef, said Paul Clayton, vice president of the American Federation of Meat Exporters (AFME).

Russian experts, however, believe that meat imports to Russia will continue to fall. The investments in the domestic pig industry were very useful and had triggered a process of import substitution, said the president of Russian Meat Union Musheg Mamikonyan.