RUSSIA - The largest country in the world has huge opportunities for pork production. With a land mass of 7 million square miles, it is twice the size of the United States, writes Paul Flint, Genesus Russia.
RUSSIA... in a word... HUGE!
The world’s second largest producer of oil and natural gas, the country has an abundance of resources. Over 22 million hectares sit idle each year that are fertile enough to raise a crop. Plenty of space, low pig density, good supply of feed stuffs and available labor are huge advantages.
The Russian Government has a target to eliminate all pork and poultry imports by the year 2020. Russia imports 50 per cent of its pork from the EU, 27 per cent from Brazil, 13 per cent from Canada and 7 per cent from the US These percentages will continue to shift up and down with these suppliers in 2013. With huge profits of up to $150.00 per head earlier this year ( US dollar ) and low cost financing and support, the industry is in expansion mode. Non traditional pork producers / venture capitalists are investing in pig farms.
While reliable price / market reporting information is difficult to come by, it’s clear that Russia’s recent entry into the World Trade Organization has added to the effect on market hog prices. The preferred market weight is 110 kilos ( 242 pounds ) and the current market hog price varies per region but the range is from 48-70 rubles per kilo. In North American dollars… from $165-$240 per head.
Much of the shift in location and herd size in Russia can be attributed to African Swine Fever. Smaller herds ( less than 10 females ) have been eliminated through buy out programs. Increased production efficiency and performance in larger units will result in 2.8 per cent more pork produced in 2012 compared to last year. This trend will continue as there are a number of new buildings are under construction. We are aware of plans for 43,500 sow spaces to be added in 2013 and another 45,000 in 2014. Much of the new construction is in the northern regions, where as in the south the majority of the ASF cases have been reported and many existing facilities are empty and are "on hold". Currently the regulations are that a site must site idle for a minimum of 6 months or more before it can be stocked following an ASF break.
Russia provides HUGE opportunities for an emerging pork industry. There is a "global" flavor as many western companies realize the potential and are focusing market efforts in Russia.
|Genesus Global Market Report
Prices for the week of July 16, 2012
(Liveweight a lb)
|USA (Iowa-Minnesota)||80.22¢ USD/lb carcass||59.36¢|
|Canada (Ontario)||1.46¢ CAD/kg carcass||53.39¢|
|Mexico (DF)||24.53 MXN/kg liveweight||85.53¢|
|Brazil (South Region)||3.52 BRL/kg liveweight||77.79¢|
|Russia||70 RUB/kg liveweight||$1.03|
|China||14 RMB/kg liveweight||$1.02|
|Spain||1.305 EUR/kg liveweight||78.73¢|
|Vietnam||38,500 VND/kg liveweight||83.92¢|
|South Korea||4,300 KRW/kg liveweight||$1.82|
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