While world agribusiness actively pursues fast growing markets in India, Southeast Asia and the Middle East, there also exists a large, dynamically expanding European feed and livestock sector: Despite enduring two economic crises during the past ten years and an international loan default ten years earlier, the USDA estimates from 2008 through 2016, Russia's feed output expanded by 7% to 10% annually. From slightly under 15 million tonnes in 2009, feed production doubled, totaling an Alltech Global Feed Survey estimated 29.1 million tonnes in 2016.

Granted, it has been a long, roundabout journey for Russian feed and livestock. From a peak of 19 million tonnes in 1990, annual feed output fell to under 9 million tonnes after 1998's sovereign loan default. During that harsh decade, a steep multi-year recession and currency troubles crashed meat consumption and made livestock farming unprofitable.

With livestock production crashing even more steeply than Russian incomes, the 1990s to mid-2000s saw a flood of chicken and pork imports that briefly made Russia a world leading meat importer. Feed output only began to recover after Vladimir Putin took power in 2000.

Thereafter, rising oil prices boosted incomes and consumption while Russia's government aggressively promoted  the substitution of domestic pork and poultry production in place of imports. Despite the ensuing 15 years of 10%+ feed output growth, mill output only exceeded its Cold War peak in 2011.

Going forward, with Russia's per capita meat consumption finally approaching levels last seen during more prosperous Cold War days, the Russian Feed Union expects output to expand at a slower pace of expansion.

Growth peaked at a 12% annual rate in the years from 2008 through 2014, after which a crashing energy prices dealt yet another brutal blow to Russia's economy. In its latest Global Feed Survey, Alltech reported that Russia's 2016 feed output had remained unchanged from 2015's level, at 29.1 million tonnes. However, with the worst of its recession over, meat consumption is on track to resume growing and with it, feed output.

At the Russia Feed 2017 Conference held in April, Valery Afanasyev, president of the Russia Feed Union estimates that feed output will continue at a slower but still dynamic 3% to 4% annual rate well into the 2020s. This implies that by 2025, Russia will producing nearly 40 million tonnes of feed and 35% to 40% more meat and fish than it does today. It also means that Russia will likely overtake Spain as Europe's feed producer.

This make Russia one of the world's fastest expanding, opportunity-rich agribusiness markets: Relative to Indonesia's promising market of 250 million people, Russia already produces 55% more feed with 110 million or 43% fewer people. From a USDA estimated 13.95 million tonnes this year, Russia's total meat production should exceed 19 million tonnes by the middle of the next decade. Even so, much like Indonesia, the sector has a plethora of technical and productivity shortcomings that make for attractive foreign investment opportunities.

While this decade has seen Russia finally exceed its pre-1990 feed and meat output quantity, the quality of production has changed substantially. Twenty-seven years ago, beef accounted for over half of Russia's beef consumption and two-thirds of its feed production, with pork accounting for 20% and poultry less than 12%.

By 2009, poultry accounted for 58.5% of feed production while pork accounted for 26%. Thereafter Russia's import substitution policies caused both poultry and pork production to flourish, with the swine feed demand outpacing that for chickens. By 2016, poultry's share of feed output had fallen to 54.5% while pork's had risen to 36%. Beef, which once accounted for over two-thirds of feed output now only used 5% of milling output.

Going forward, much like China did before, Russia intends to defy once traditional agribusiness assumptions about developing countries and let red meat consumption overtake that of poultry. The Russian Feed Union forecasts that from 2016 through 2025, feed output for poultry, swine and beef cattle will rise by 29%, 61% and 20% respectively.

Assuming that feed conversion ratios improve, that would imply that by 2025, output of chicken, pork and beef will rise by 33%, 67% and 22% from today's levels. It also implies cumulative annual production growth in Russia's chicken, pork and beef output of 2%, 3.2% and 5.8% annually respectively.

With pork's production and consumption growing twice as fast as that of chicken, it means that by 2025, Russia's consumption of pork will roughly equal that of its chicken and exceed it before 2030. Only per capita beef consumption will remain significantly down from early 1990s levels.

While all this entails a bright future for Russian agribusiness, the sector also faces serious supply side challenges. Of these, the greatest is the need to improve feed quality, which has been implicated in poor animal productivity.

Speaking at the Russian Feed Industry Conference in April, Valery Afanasyev, President of the Russian Feed Union, stated that most Russian feed contains inefficient amino acid ratios and lacks supplements to correct the resulting nutritional imbalances.  As a result, Russian poultry and livestock consume up to two times the quantity of feed required to achieve the same weight gain as in other countries.

Much of this is due to the overuse of feedgrains at the expense of protein meals. According to the Russian Feed Union, grains account for up to 70% of feed rations, compared to 40% to 45% in European Union countries. Unlike immature Asian markets, this is not due to Russian livestock's unconsolidated state or a lack of education among farmers, as the problem even impacts well capitalized integrators.

With respect to nutritional inputs, Russia produces too much feedgrain and not enough oilseeds or protein meals. According to Nadezhda Orlova, general director of research firm Abercade, the problem is that unlike China, Russia entirely depends on imports for its vitamins, amino acids and fermented enzyme compounds. Orlova estimates that 100% of feed vitamins, 85% to 95% of livestock antibiotics, 80% of amino acids and 70% to 80% of all probiotics and prebiotics are imported.

This would not be a problem for a developed country with a stable currency. Unfortunately, on a purchasing power parity basis, the unstable Russian rouble been almost constantly undervalued since the late 1990s. That makes the cost of importing feed supplements required to correct an overabundance of grain in rations prohibitively expensive even for Russia's top integrators.

Significant progress in improving Russian feed's quality can only be made when the country's economy stabilizes enough for its currency to rebound to a much higher level than today. This of course, requires a recovery in energy prices that is not expected to occur before 2020.

Due to political friction with western countries and economic sanctions, it is also economically plausible for multinationals to establish feed supplement manufacturing facilities in Russia in the way they did in China. Hence, for the forseeable future, both meat production and animal productivity will continue to be held back by poor feed quality.

Even so, Russia will have come full circle with respect to its meat consumption habits, going from 77kg of total beef, chicken and pork consumption in 1990, to 34kg in 2000 and back to 62kg this year. By 2025, Russia will finally exceed its 1990 consumption, eating 81kg per capita –but the consumption profile will have completely changed.

From 35kg in 1990, per capita beef consumption has fallen to 12kg and looks to be no higher than 13kg in 2025. Chicken meat consumption by comparison has skyrocketed, from 7.5kg per capita in the early 1990s to 27kg today. Going forward, it will grow more slowly than before, totaling 34kg by 2025.

With Russian incomes rising, swine has become Russian feed and livestock's dark horse. After watching its per capita consumption dive from 24kg in 1990 to 11kg in 2000, rising incomes have enabled Russians to recover their pork consumption, which will total 23kg this year. While the production of poultry and pork will both rise sharply, the latter will do so by more. Such that by the mid 2020s, Russian pork consumption should equal that of poultry and exceed it shortly thereafter.

The opportunities created by Russia's expansion have to be seen in a regional context: With a 144 million people, Russia is the natural, large-scale centre of a rapidly growing Eastern European agribusiness sector that contains 60 million people of similar income levels in neighboring countries such as Hungary, Romania, Czech Republic and Slovakia.

Before it can act as a regional hub however, Russian agribusiness has to get its own act together: The country's top ten feed milling companies only produce 35% of the country's feed; its top 20 feed millers only 49%. It unconsolidated state and EU sanctions means that Russian agribusiness cannot achieve its natural role of becoming the hub of a fast growing East European feed and livestock industry.

Moreover, unlike Vietnam or Indonesia, where foreign integrators use their overseas resources to cheaply import livestock supplements and leading edge technology, Cargill (850,000 tonnes)  and CP (550,000), the two multinationals in Russia's top ten integrator list make less than 5% of the country's feed. That limits the extent to which the country's feed and livestock productivity can grow.

Needless to say, a climate that encourages foreign investment and technology in Russian agribusiness could make for even more optimistic growth forecasts than what are being currently projected. Even so, whether Russia becomes as friendly to investment as its East European neighbors or continues to run as a standalone economy, it will remain one of the world's largest, most promising agribusiness frontiers.