August 29, 2008
On top of political issues, US poultry exporters are now worried about shipment prospects to key market Russia.
Relations between Russia and the US fell to a new low due to political clashes regarding the South Ossetia War in early August.
Russian agriculture minister Alexei Gordeyev announced on Wednesday (August 27, 2008) that the US-Russia Bilateral Meat Agreement signed in 2005 as part of its effort to join the WTO was no longer in Russia's interest, and import quotas for chicken and pork would be slashed dramatically by hundreds of thousands of tonnes.
Sean Spicer, spokesman for the US Trade Representative's office warns that the move would make it more difficult for Russia to complete its 15-year bid to join the WTO.
Poultry is an easy target whenever there are issues in the US-Russia relationship but there is an understanding that Russia's domestic poultry production has been increasing, according to Jim Sumner, president of the USA Poultry and Egg Export Council (USAPEEC).
Even before the political conflict occurred, poultry market lobbies from the US and Russia have agreed in principle to cut tariff quotas on US poultry imports from 931,500 tonnes to 750,000 tonnes starting from next year, which could reduce future market access, Sumner said.
Sumner added that he do not believe that US poultry would be out of the Russian market overnight.
The Delmarva Poultry Industry Association is worried that the decline in Russian imports of US poultry could hurt Maryland and Delaware farmers. The association also said Russia's decision would also affect local corn and soy farmers, whose produce is used as chicken feed. In 2006, Delaware's poultry accounted for 76 percent of cash farm income.
US exports of poultry and meat products to Russia totalled nearly US$1 billion in 2007. Shipments of frozen US broiler quarters reached nearly 640,000 tonnes last year, more than six times the amount exported by Brazil. The 2005 meat agreement allows the US to export as much as 901,400 tonnes of poultry to Russia this year at reduced duties, according to a March 2008 report by agricultural officials at the US Embassy in Moscow.
