October 7, 2010

Russian beef production increased by feed shortages

Russian beef production in 2010 is expected to grow for the first time in more than two decades, rising 1% to 1.3 million tonnes cwt, due to feed shortages and higher feed costs.

The severe drought in the country has resulted in higher slaughter, according to the US Department of Agriculture (USDA).

However, beef production is expected to continue its long term decline, contracting 2% in 2011 to 1.27 million tonnes cwt. This is a result of the industry's low profitability, as Russian beef production continues to be a by-product of the local dairy industry.

In addition, the 3% rise in cattle slaughter in 2010 to 7.69 million will accelerate the decline in the herd which is estimated to have fallen 4% to 16.92 million in 2010. It is forecasted to fall a further 4% to 16.32 million in 2011.

The USDA has also revised its forecasts for Russian imports in 2010. Russia's beef imports are expected to rise 8% to 1.08 million tonnes cwt, which is much higher than the previously expected 1% rise to 0.9 million tonnes cwt.

Russia's local pork industry has experienced growth in recent years - compared to the cattle and beef industry - and is also expected to be impacted by the tighter feed supplies. Higher slaughter will slow the expansion of the pig herd to 2.4% in 2010 when compared to the previous expected growth of 3.4%.