March 29, 2011


Russia's livestock hampered by high feed costs



High feed costs will hamper growth of Russia's livestock industry this year until the new grain harvest reduces supply pressures, USDA said on Monday (Mar 28).


The number of pigs in Russia is set to grow 1.8% to 17.51 million pigs by the end of the year, although pork production is predicted to stay flat this year compared with a 4% growth in 2010, USDA's Moscow attache said.


Following an initial wave of higher slaughter rates in 2010, beef production is expected to be limited to 1.4 million tonnes in 2011, a 2.4% drop from last year, due to a sharp reduction in the number of cattle.


"This accelerated decline in the cattle herd over the last two years is in direct consequence of increased feed prices, which increased slaughter rates starting in the summer of 2010," said USDA.


Farmers in Russia have been struggling to cope with record feed prices after a severe drought last summer, which slashed the harvest and cut feed supplies by 25% by the beginning of this year, compared with a year ago.


Despite efforts by the Kremlin to distribute millions of tonnes of intervention grain and government subsidies of more than US$3 billion to support the livestock industry, USDA said costs are likely to be passed on to consumers.


"Inflation for meat products has been relatively low in 2010 compared to past years in Russia," USDA said. "However, lower pork and poultry production growth and decreasing beef production will push prices for pork and beef higher in 2011."

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