October 30, 2019

 

Russia becomes biggest importer of dairy cows from Europe

 

Thousands of Holstein cows have crossed the border into Russia's new state-of-the-art German-Swedish engineered milking facilities as part of efforts to modernise the dairy industry, reported Bloomberg.

 

45,000 heifers from the European Union (EU) worth €100 million (~US$111 million) have been imported into Russia, which makes the country the biggest importer two years running and double the total number of heifers imported in 2016.

 

This government initiative aims to make Russia's dairy industry self-sufficient over the next eight years, with a bigger goal of selling Russia-produced dairy to China.

 

Previously, Russia has invested heavily in its agriculture industry through state subsidies, discounted loans and farm rebates. Its poultry and swine industries have now become self-sufficient through these government programmes. The country is also one of the largest producers for wheat.

 

These generous subsidies are now implemented for growing dairy industry. Stefan Duerr, founder of Ekosem-Agrar, Russia's largest milk producer said the company can access bank loans at 2.5% interest rates, compared to the country's central bank key rate of 7%. There are also 25% refunds offered by the government on investments towards large industrial farms.

 

Eight new dairy facilities have been opened by Ekosem-Agrar, with its dairy cattle numbers reaching 80,500 – seven times more from seven years ago.

 

Duerr added that the company is looking to export its dairy products to Korea, Indonesia, Vietnam, as well as African and Arabic nations, in addition to China.

 

Russia's fourth-richest tycoon Vladmir Lisin had voiced his intention to invest in the dairy industry. The steel and transport billionaire planned to spend 18 billion rubles (~US$282 million) to construct processing plants and dairy farms.

 

The National Dairy Producers Union said Russia's dairy industry has received investments totalling more than 200 billion rubles (~US$3.1 billion) since the country banned imports of EU food in 2014.

 

However, the union said for Russia to become self-sufficient dairy producers, 36.3 million tonnes of milk needed to be produced in 2018 - 19% more than what the country can produce now. In addition, more modern facilities with strict quality controls to convert raw milk into dairy products like butter and cheese are needed.

 

Artyom Belov, general director of the National Dairy Producers Union said the dairy industry has enormous potential for development and requires plenty of investment to move forward.

 

-    Bloomberg