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Audio: Insights from the Russian Red Meat Market

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With the Russian market closed to U.S. pork and beef, U.S. Meat Export Federation (USMEF) Manager Yuri Barutkin, who is based in St. Petersburg, is now focused on market development efforts in Europe and in the region surrounding Russia. But in the attached USMEF audio report, Barutkin offers his observations on the state of Russian pork and beef production and red meat trade. He notes that the Russian government has increased its support for domestic meat production, and this has raised Russia’s level of self-sufficiency. Barutkin adds, however, that the higher level of self-sufficiency is also due to lower per-capita consumption.

Many of Russia’s traditional red meat suppliers – such as the European Union, the U.S., Canada and Australia – are locked out of the Russian market due to economic countersanctions related to the ongoing conflict in Ukraine, so only a few major exporting countries remain eligible. Russia’s primary red meat supplier is now Brazil, although Russia also imports beef from Paraguay and pork from Chile. But with economic conditions in Russia having a negative impact on consumers’ disposable income, even these remaining suppliers often struggle with sluggish demand.


TRANSCRIPT:

Joe Schuele: With the Russian market closed to U.S. pork and beef, U.S. Meat Export Federation Manager Yuri Barutkin, who is based in St. Petersburg, is focused on efforts in Europe and the region surrounding Russia. But in this USMEF report, Barutkin discusses the state of Russian meat production and meat trade.

Yuri Barutkin: The Russian government has emphasized the importance of self-sufficiency in meat and they’ve give quite a bit of support to the domestic producers, mostly pork and chicken. You know that to achieve greater levels of self-sufficiency, and in many ways self-sufficiency has gone to a new level, definitely for chicken and pork – less so for beef, but a lot of people are commenting this has happened not because the production has grown so much, but because the consumption of meat has actually gone down. The economy is going through some troublesome times, with the lower oil prices and the economic sanctions that were imposed. So the Russian economy has actually been contracting over the past few years and that resulted in the disposable income of the Russian population going down – and lower per capita consumption of beef and pork. The self-sufficiency figures are up due to the growth of production, but also due to the contraction of consumption.

Joe Schuele: With many of its traditional meat suppliers locked out of the Russian market, only a few exporting countries remain eligible, and even those suppliers sometimes struggle to generate demand.

Yuri Barutkin: On the pork side and on the beef side, we’ve got Brazil. On the beef side, we’ve got Paraguay shipping some product, as well. For pork we’ve got Brazil and Chile. They have not been affected by the sanctions. Initially they had been offering it at a very high price, hoping they could capitalize on the fact that everybody else is out, but they’ve adjusted. You know, the Russian market can only pay so much for pork and beef.

Joe Schuele: For more information, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.