World meat industry news

Will the expected sanctions on Russia impact global meat trade and demand? Steiner Consulting Group posed this question in the Feb. 24 Daily Livestock Report. “A while back, Russia was a major buyer of proteins in the world market. We still remember when prices for chicken leg quarters in the U.S., or the price of beef in Brazil, would be greatly affected by events in Russia. That is no longer the case,” Steiner Consulting Group wrote. 

In the last decade, Russia has become self-sufficient in providing its own meat protein. According to USDA’s Foreign Agricultural Service data, as recently as 2010, Russia relied on pork imports for about a third of its pork consumption. However, in 2021, USDA points out that Russian domestic pork consumption was 26% higher than in 2010 and the country is now a net exporter of pork. 

Despite African swine fever (ASF) outbreaks during this time period, Russia increased its domestic pork output by 86% and completely eliminated its dependence on imports, Steiner Consulting Group said.

In the early 2000s, more than half of the chicken that Russian citizens consumed came from imports. By 2010, Russia’s imported share had dropped to 27% and last year imports accounted for just 5% of consumption. Meanwhile, Russia exported almost as much chicken as it imported. Since 2010, Russian domestic chicken consumption has increased 36% while domestic chicken production increased 67%. 

Meanwhile, beef has been a more difficult protein to secure within Russia considering land limitations and domestic preferences. Russian beef consumption has declined 32% since 2010 and domestic production is 5% lower than it was 11 years ago.

“Russia still buys beef in the world market, but that volume is down 67% from where it was in 2010 and even smaller than it was in 2006 or 2007 (before the financial crisis). Most of the beef that Russia bought in 2021 came from two sources: Paraguay and Belarus,” Steiner Consulting Group wrote.  

Russian imports from Belarus are unlikely to be affected by Russia’s military operation in Ukraine. Steiner Consulting Group believes the impact from a reduction in South American imports is likely to be minimal on global trade. 

“Bottom line: Impact from restrictions on Russian protein purchases in the world market are likely to have no impact on global trade,” Steiner Consulting Group said. “However, Russia and Ukraine are major contributors to global grain and oil trade, and they are also major suppliers of fertilizers. High feed and energy costs are negative for U.S. livestock producers, and they will negatively impact their ability to bring more product to market. Ultimately this is bad news for U.S. meat protein consumers.”

Steiner Consulting Group said what’s even more uncertain is how a further spike in inflation could impact domestic and export demand. 

“In this context, high-priced proteins, like beef, face more downside risk than pork or chicken,” Steiner Consulting Group wrote.