International Egg and Poultry Review - By the USDA's Agricultural Marketing Service - This is a weekly report looking at international developments concerning the poultry industry, this week covering poultry production in Russia.

Russia

Industrial production of poultry is steadily outpacing small-scale producers in Russia. Several large Russian agricultural corporations are continuing to buy idle or inefficient farms in order to create nationwide production. These investment companies, often formed by oil companies, have significant resources that can finance the reconstruction and re-equipment of existing facilities. The largest farms now comprise the entire production cycle: feed, breeding, hatcheries, broiler production, slaughter and retail sales.

Russian broiler production is forecast to grow by ten percent in 2004, to 640,000 MT. The growth in broiler production would mark the seventh straight year of increased production and a 320 percent increase since the low point in Russian production in 1997. Turkey production is forecast to remain unchanged.

Low grain output in 2003 combined with high grain exports in 2002- 2003 will result in short feed supplies in late 2003 and early 2004. Wheat makes up greater than 50 percent of the Russian poultry feed ration. Reduced local production and higher prices will have a large impact on profitability in the coming year. Some regions are already taking measures to ensure sufficient grain supplies for poultry farmers. In some of the southern regions of Russia, regional governments are recommending farmers pay land taxes with grain. This grain collection would then go into an emergency poultry feed fund.

Traditionally, Brazil exported whole birds and the U.S. exported leg quarters. The U.S. was allocated 75 percent of the quota while Brazil was allocated about 5 percent, so the structure of imports is expected to change. Imports of leg quarters will increase while imports of whole birds will fall. Imports of turkey meat are forecast to fall by 18 percent as importers choose to use quota licenses for chicken rather than turkey.

The poultry quota is being distributed through a licensing system that allows only historical importers to participate. If Company X imported two percent of Russian poultry imports from 2000-2002, the company will receive two percent of the Tariff Rate Quota (TRQ) licenses.

Each company’s import license is also restricted by country of origin. Each country’s quota was also delimited by an mechanically deboned meat (MDM) breakout. A minimum of 25 percent of each country’s total exports were required to be MDM.

The final issuance of poultry import quota licenses went into effect on July 29, 2003. After the closing of the July date, about 80 percent of the poultry licenses had been distributed.

The Ministry of Economic Development and Trade (MEDT) plans to redistribute the 20 percent of the poultry quota that remains unclaimed. MEDT states that it intends to recalculate the MDM share of each country based on MDM’s actual share of trade for that country during the reference period. This would decrease the MDM share for certain countries, including the U.S. Secondly, MEDT has stated that it will revise the historical importer list to include companies that imported in the first quarter of 2003.

Further information

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Source: USDA's Agricultural Marketing Service - 2nd September 2003.