Canada may be able to fill the gap in Russia’s undeveloped beef sector.
“There is comparatively no money going into beef production,” said Richard Brown of the British food consulting firm Gira.
“The money is going into chicken production so Russia will rely on imports for a goodly long time.”
The Canada Beef Export Federation has hired Gira to explore new market possibilities outside its traditional mandate of Mexico and Asia.
A positive report may encourage the federation to open a trade office in Russia.
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After 100 years of political and economic upheaval in Russia, the country’s livestock industry is in varying stages of improvement, said federation president Ted Haney.
Russia’s pork and poultry sector are growing with large outside investment in barns and production, but beef demand is in decline.
“There is no strategic investment in beef production but there is long strategic investment in poultry and new strategic investment in pork,” Haney said.
Besides strong competition from other meat, Canada’s beef exporters also face Russian import quotas and tariffs on chilled and frozen beef.
These will be reviewed next year, but it’s not yet known who will receive an allocation or the size of the tariffs.
The U.S. had a quota of 18,500 tonnes because it traded beef before 2000. Canada traded liver during that time and did not get a quota.
However, Russia imported 640,000 tonnes of beef in 2007 with more than half being over the quota rate of 470,000 tonnes. Most of that came from South America because it was still possible to make a profit after paying the tariff penalty.
The European Union was once a major supplier but that has been declining.
Sixty percent of beef and pork production took place on small farms last year while the rest was on large industrial farms.
Poultry growth has been mainly on large industrial farms with plenty of investment in modern and efficient processing.
Russian beef tends to be lower quality, and the processing industry relies heavily on imported meat for sausage, further processed products and canned meat.
The Russian dairy and beef herd declined from 55 million head in 1990 to 21 million head in 2007.
Meat consumption in 1990 was 80 kilograms per capita and is now less than 60 kg. It is slowly growing again but the real gains are in pork and poultry.
Poultry production doubled from 800,000 tonnes to 1.9 million tonnes between 2000-07, while 1.8 million tonnes of pork were produced last year.
Beef production has been stable since 2003 at around 1.7 million tonnes per year.
Population growth is flat at around 142 million people. Average incomes are about $500 US per month, an improvement from $120 in the last decade.
