And it was far more a warning than a wish of good fortune! Brazil’s livestock sectors in general and pork sector in particular said this based on a long history of dealing with Russian needs and whims and knew full well how difficult that process could be at times.

We were once again reminded of our Brazilian friend’s warning this week as Russia announced that it wanted all US beef and pork imported into Russia to be tested and certified free of ractopamine, a beta agonist feed additive used in the US and many other countries to improve animal performance in pigs and beef cattle. The US Meat Export Federation said that the requirement could halt shipments of US products to Russia by last Saturday, 8 December. A primary concern is simply meeting the paperwork requirement, especially for product that is already in transit. A Reuters report quoted USMEF estimates that there were 210 shipping containers of US pork and beef valued at around $20 million already on their way to Russia.

How important is the Russian market to the US beef and pork industries? The appropriate answer is “Not unimportant by any means. Small relative to some others but growing.“ US beef companies had shipped 121.7 million pounds of carcass weight equivalent product to Russia through September. That figure is up 5.3 per cent versus last year and represents 6.6 per cent of total US beef exports. It is also roughly one-third of the amount of product shipped to Japan, our largest beef export customer, through September. Russian exports accounted 0.6 per cent of US beef output so far in 2012. September’s monthly beef exports to Russia (11.982 mil. lbs., carcass) represented 0.59 per cent of September output.

On the pork side, Russia has been one of the star markets thus far in 2012 with shipments there growing by 41.1 per cent, year-on-year, through September. US pork processors had shipped 213.7 million pounds of carcass weight equivalent pork to Russia, about one-fifth that amount that had moved to our largest pork customer, Japan, and one-quarter as much as has been shipped to Mexico. Russian exports of pork accounted for 1.4 per cent of total September pork production. Year-to-date through September, exports to Russia accounted for 1.3 per cent of pork output.

Does this mean that exports will stop if the Russians remain adamant? Not necessarily—especially for pork. US pork producers and processors have been producing non-ractopamine fed pigs for China for some time. Beef producers could do the same, we suppose, if the markets are large enough and pay well enough. We think the Russian situation poses a bigger challenge for US beef exporters simply because the “non-ractopamine“ system doesn’t appear to be as well established.

One of the damaging aspects of these situations is their leveraging by US anti-meat and anti-modern agriculture groups. Do not be surprised to hear some “This product is banned even in Russia so we should ban it here, too“ demands from the usual groups that would limit modern technology no matter how safe it has been proven to be. We’re guessing that this action by Russia is motivated far more by protectionism than by an abiding concern for the well-being of Russia’s citizens.

Friday’s labor report from the Commerce Department was another of those “That’s good — no that’s bad“ pieces of information with one’s view very likely strongly correlated with the party that received one’s vote last month. The economy added 118k jobs in November and the unemployment rate fell to 7.7 per cent, its lowest rate since January 2009 when it stood at 7.8 per cent. Those are the good news. The bad news is that total employment still stands 3.3 per cent lower than at its prerecession peak in January 2008. That figure (111.744 million) is 4.6 per cent higher than at the worst of the recession and 1.4 per cent higher than last year.

The other piece of bad news is that the labor participation rate remains at only 63.6 per cent of the work force, just 0.1 per cent above it’s modern low set in August which was itself the lowest figure since September 1981. And even though there are more jobs and a lower percentage of the work force is out of work, we remain concerned about the amount of money they have to spend. Real per capita disposable income yr/yr growth remains very slow and every month of 2012 was revised down to below 1 per cent in October. Will these growth rates support strong meat/poultry demand?