U.S. beef exporters eye return to Russia
Russia has been closed to U.S. beef products for more than three years, but changes in the global beef supply is helping to push the door to this once important market back open.
Until 2004, the European Union held a 33 percent share of the Russian beef import market, but a decrease in subsidies by the EU has caused a recent drop in beef production.
From 1990 to 2004, beef production in the EU dropped by 18 percent, according to the U.S. Meat Export Federation, a trade group that tracks overseas markets for U.S. beef shippers. In July 2006, the EU agreed to eliminate 233,000 metric tons of its beef quota for Russia to other countries because it was unable to fulfill its quota of 343,000 metric tons.
On top of that, the United Nations Food and Agriculture Organization forecasts another 6 percent drop in EU beef production between 2005 and 2015.
South America has now become a major supplier of beef to Russia, and with the EU giving up most of its quota, opportunities are now emerging for U.S. suppliers. “Russia has the potential of becoming a large market for U.S. beef,” said Ricardo Vernazza-Paganini, USMEF’s director of Central and South America and global strategic coordination, in a statement.
Prior to 2003, Russia was the fifth largest export market for U.S. beef. A bilateral trade agreement signed between the United States and Russia on Nov. 19, 2006 will provide access for both boneless and bone-in beef from cattle 30 months of age or less and will lead to broader access to U.S. beef in mid-2007, the federation said.
Starting Jan. 22, USMEF representatives will spend 14 days in Russia measuring the size of the market for high-end U.S. beef products for restaurants and retail stores, and assess Russian consumer attitudes toward U.S. beef. The federation will analyze the data and create a “re-entry strategy,” which will be supplied to its members.
USMEF noted that several changes still need to be taken by the U.S. and Russian governments before U.S. beef exports can resume:
*Russian officials must visit and audit U.S. meat plants.
*U.S. Department of Agriculture’s Food Safety and Inspection Service must update its library with new export requirements.
*An export verification program from USDA’s Agricultural Marketing Service must be published.
Russia, like many countries, closed its borders to U.S. beef in late December 2003 after the USDA confirmed a case of bovine spongiform encephalopathy, or “mad cow” disease, in a Washington state cow. Since then, the USDA has helped to restore the U.S. beef export trade with many countries.