Russians Shun Red Meat, Turn To Fowl

Aleksandras Budrys, PlanetArk 31 Mar 09;

MOSCOW - Russia will consume 20 percent less pork and beef this year and cut imports substantially as the global economic crisis drives consumers to buy cheaper poultry meat, the head of the National Meat Association said.

Meat processors are also adding more offal to their sausages as consumers cut spending on food products to weather Russia's first recession in a decade, Sergei Yushin told Reuters in an interview.

"We expect the decline to support poultry producers, as normally demand shifts to poultry meat from red meat," Yushin said. "However, if poultry prices rise, some may switch to non-meat products."

Russia produced about 6 million tonnes of meat in 2008 and consumed almost 9 million tonnes, or 3.1 percent of the world's entire meat consumption, data from the association shows.

Yushin, whose powerful industry lobby unites major meat importers, processors and animal breeders, said Russia should retain current import quotas on poultry and pork.

But beef import quotas could be raised by 20-25 percent from 2010 as Russian cattle numbers continue to decline, he said.

"We are unable to compete with many meat producers and therefore we will have to keep import quotas for at least the next three years," Yushin said.

Cattle breeding in Russia, however, had no prospects for growth in the next 10 years due to the huge investment required and the lack of available cheap loans.

"Cattle numbers are falling and will keep falling," he said.

The National Meat Association favours the abolition of country-specific quotas, Yushin said, but he added that such a move would encounter strong resistance from influential US meat lobbies and some Russian importers.

"Quotas only imply the right of importers to ship in a certain amount, but it is by no means an obligation," he said.

BEEF IMPORTS FALL, OFFAL UP

Russian beef imports in the first two months of 2009 fell by more than 40 percent year-on-year to 39,000 tonnes, data from the association showed.

Pork imports fell by 31 percent to 53,000 tonnes and poultry imports by 18 percent to 92,000 tonnes in the same comparison.

But imports of beef offal rose by 20 percent in January-February 2009. Pork offal imports were up 23 percent.

"This means that processors are adding more cheap offal to sausage, as nobody is going to buy expensive sausage," Yushin said.

Last year, Russia produced 2.2 million tonnes of poultry meat and imported 1.2 million tonnes. Pork output was 2.0 million tonnes and imports 770,000 tonnes, while beef output was 1.65 million tonnes and imports around 800,000 tonnes.

The import figures do not include offal and live animals.

Russia regulates imports by tariff quotas. The poultry quota for this year has been reduced by 300,000 tonnes and a tariff on pork imported above the quota has been raised.

"The situation favours poultry meat producers. In the first two months of this year, production rose by another 60,000 tonnes year-on-year," Yushin said.

"This is a big figure, taking into account that they plan to raise output by 300,000 tonnes this year."

Despite falling pork consumption this year, Yushin said the pig-breeding sector in Russia had good prospects. Feed is cheap after a good grain crop, modern breeding complexes have been built and producers have become more market-oriented, he said.

"The pig-breeding sector is becoming very profitable and people working in it want to increase output," he said. "Grain prices are not expected to rise, fuel is becoming cheaper and pork producers will have another good year."

This year, pig breeders may provide an additional 100,000-200,000 tonnes of domestic pork -- despite the financial crisis -- as a result of investments made in 2007-08, he said.

But new investments would be difficult, he added, and the owners unfinished complexes might have problems with new loans.

(Editing by Robin Paxton)