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2014 Media Kit

Russia gains taste for US beef as it shuns chicken

By: | at 08:00 PM | International Trade  

Russia may not like U.S. chicken or pork, but it likes U.S. beef and has bought over 6,000 tons of it this year, a nearly 30-fold increase from 2009 as tight supplies in traditional suppliers Australia and South America have turned business here.

This has been good news for U.S. beef and cattle producers, who are enjoying huge profits for the first time in nearly two years due in part to strong exports to Russia and elsewhere.

Russia purchases this year have largely been higher-priced “muscle” cuts from the round and chuck portions of the carcass, instead of the lower-priced beef liver it bought previously.

Industry sources warned this increase in business may be temporary. An import quota in Russia could soon trigger higher duties on the beef and slow sales.

Russia has a history of making short-term forays into the market before suspending or reducing purchases.

The increase in beef to Russia occurs as that country has banned U.S. chicken because of a chlorine rinse used here and drastically reduced purchases of U.S. pork amid concerns about an antibiotic in the meat.

“They are switching to other products, especially beef, in face of their self-imposed problems with chicken and pork,” said Jim Robb, economist with the Livestock Marketing Information Center.

Russia’s concerns with U.S. chicken and pork appear to have been resolved, which could increase sales of those products later this year.

The 6,432 metric tons of beef were shipped to Russia year-to- date through March, according to monthly U.S. Agriculture Department data released on Thursday. That compares with 217 metric tons shipped a year earlier.

Using more current USDA weekly export data, year-to-date shipments are 9,158 metric tons, said U.S. Meat Export Federation economist Erin Daley,

Quota May Dampen Russia’s Taste For Beef
The bulge in beef sales to Russia may not last long. The country has a 21,700-metric-ton quota on U.S. muscle cuts of beef, any amount in excess of that will trigger a higher import duty that could quickly slow sales, said Daley.

“This year we expect to fill that quota,” she said. “Beef shipped within that quota has a 15 percent duty and if its over that it goes to a 50 percent duty.”

Beef exports have increased to many countries this year including Canada, Japan, South Korea, Taiwan, and Hong Kong, but the percentage gain to Russia has been the largest. Tight global supplies of beef and other meat has helped shift demand to the United States.

If the Russian quota on imported U.S. beef is reached and the duty increases, Robb said that country could quickly switch back to buying U.S. chicken or pork.

“I don’t think it will bring (beef ) exports to a halt, but I think it will really push them to quickly revert back to chicken,” he said. (Reuters)