NOTE: USDA unofficial data excludes Crimean production and exports. As of June 2014, the Russian Federal State Statistics Service (Rosstat) began incorporating Crimean production and trade data into its official estimates. Where possible, data reported by FAS/Moscow is exclusive of information attributable to Crimea.

Russia: Swine Numbers, 1,000 Head

Animal Numbers, Swine

2013

2014

2015

Market Begin Year

Jan 2013

Jan 2014

Jan 2015

Russia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Total Beginning Stocks

18,816

18,816

19,081

19,081

19,000

19,413

Sow Beginning Stocks

2,325

2,325

2,450

2,355

2,565

2,375

Production (Pig Crop)

36,000

36,000

38,500

37,000

40,700

37,300

Total Imports

86

86

8

8

0

1

Total Supply

54,902

54,902

57,589

56,089

59,700

56,714

Total Exports

0

0

0

0

0

0

Sow Slaughter

0

0

0

0

0

0

Other Slaughter

34,000

34,000

36,500

34,750

38,350

35,000

Total Slaughter

34,000

34,000

36,500

34,750

38,350

35,000

Loss

1,821

1,821

2,089

1,926

2,050

2,014

Ending Inventories

19,081

19,081

19,000

19,413

19,300

19,700

Total Distribution

54,902

54,902

57,589

56,089

59,700

56,714

Russia: Pork production, Supply & Distribution (1,000 MT CWE)

Meat, Swine

2013

201

2015

Market Begin Year

Jan 2013

Jan 2014

Jan 2015

Russia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Slaughter (Reference)

34,000

34,000

36,500

34,750

38,350

35,000

Beginning Stocks

0

0

0

0

0

0

Production

2,400

2,400

2,650

2,510

2,820

2,550

Total Imports

868

868

460

515

375

200

Total Supply

3,268

3,268

3,110

3,025

3,195

2,750

Total Exports

1

1

1

1

1

1

Human Dom. Consumption

3,267

3,267

3,109

3,024

3,194

2,749

Other Use, Losses

0

0

0

0

0

0

Total Dom. Consumption

3,267

3,267

3,109

3,024

3,194

2,749

Ending Stocks

0

0

0

0

0

0

Total Distribution

3,268

3,268

3,110

3,025

3,195

2,750

Production

Swine

FAS/Moscow anticipates swine inventories to reach 19.7 million head by the end of 2015, a 1.5 percent increase in inventories and a slightly smaller increase than was realized in 2014. The Russian swine herd has being growing over the last decade, and the trend is expected to continue in 2015, but at a slower pace as a result of the current economic conditions. The Russian industry continues to consolidate production at large-scale agricultural establishments. Agricultural establishments accounted for 80 percent of the total swine herd inventory in 2014, a three percent increase over 2013 levels, and further consolidations are expected this year. Swine inventories at backyard farms will most likely decline due to increased feed/production costs and continued efforts to control African swine fever (ASF).

Total 2014 swine inventory estimates have been revised pursuant to official year-end 2014 statistics published by Rosstat.

Pork

FAS/Moscow forecasts Russian pork production will reach 2.55 MMT in 2015, a 1.5 percent increase over revised 2014 levels. According to the National Union of Pork Producers (NUPP), the top twenty Russian pork producing companies accounted for nearly 60 percent of total pork production in 2014, and NUPP forecasts this share to reach as high as 80 percent by 2020. Despite the current economic challenges, several of the largest pork producing companies in Russia – e.g., ABH "Miratorg" (Kursk region), "Rusagro" (Tambov region, Primorsky Krai) , Cherkizovo (Lipetsk region), "Agropromkomplektastsia" (Kursk region, Tver region), Sibirskaya Agro-Group (Krasnoyarsk, Buriatia, Tyumen, Tomsk) and "Agroeco" (Voronezh region, Tula region) – intend to invest an additional 193.3 billion rubles (approximately $3 billion), combined, to add another 1.146 MMT of pork production capacity to their current collective capacity of 1.026 MMT by 2020.

Although pork production increased roughly 1.3 percent in 2014, accounting for approximately 80 percent of domestic consumption, the Russian market, particularly in the second half of the year, was characterized by extreme volatility, including for prices, producer margins, and supply and demand. Trade restrictions were imposed on EU pork in February 2014, after a ban had already been placed on Belarusian supplies -- both due to the detection of ASF in their territories. Subsequently, a ban on pork from the United States and Canada (as well as Australia and Norway) was imposed in August 2014. These bans resulted in shortage of pork, particularly for the Russian meat processing sector. Wholesale prices for pork, which had already been growing before the imposition of the August ban, continued to increase after the additional trade restrictions and margins increased for domestic Russian producers.

However, shortly thereafter, beginning in November 2014, notable changes in the Russian Ruble exchange rate were realized, resulting in a much weaker ruble versus the U.S. dollar and Euro and, in part, an increase in Russian grain exports in the fourth quarter of 2014. The spill-over effect was that Russian feed prices, in turn, increased as well increasing the production costs of Russian pork producers. Although pork prices started to fall in late 2014, reduced consumer demand outpaced the decline in prices as buyers quickly started to turn towards less expensive protein sources (e.g., poultry meat). In addition, Russian meat processors reportedly began to purchase less expensive poultry meat as the predominant component in their processed meat production. As such, and based on year-end data, FAS/Moscow has reduced the estimate for Russian pork production by slightly more than 5 percent, to 2.51 MMT.

Consumption

Despite the continued expectation of year-on-year growth in Russian pork production, consumption is expected to fall in 2015 as imports are anticipated to be significantly lower than they were in 2014, and as consumers are expected to continue to increase their consumption of less expensive poultry meat. FAS/Moscow forecasts 2.749 MMT of pork consumption in 2015, nine percent lower than 2014 levels.

Average retail prices for pork steadily increased in 2014 (i.e., prices were 25 percent higher in January 2015 than they were at the same point in 2014), while wholesale prices were even more volatile. The wholesale price for pork reached record levels in October 2014 (i.e., 197 rubles per kilogram of grade 1 pork and 175 Rubles per kilogram of grade 2 pork).

As stated above, pork prices declined in November and December 2014 as a result of reduced consumer demand for pork in the market as meat processors and consumers increasingly utilized less expensive poultry meat in lieu of more expensive pork– a trend that is anticipated to continue in 2015.

Trade

Swine

Despite having imported 86,000 hogs in 2013, Russian live swine imports dropped precipitously in 2014, to only 8,000 head.

The Russian veterinary service has placed restrictions on several foreign suppliers of live hogs to Russia. For example, Russia has restricted supplies from the European Union and Belarus because of detections of African swine fever in those territories, and the United States and Canada because of detections of porcine epidemic diarrhea virus. The only country which supplied live swine to Russia in 2014 that currently still has market access is Norway. As such, it is unlikely that live swine imports will exceed more than 1,000 head in 2015 if current restrictions remain in effect. As such, FAS/Moscow has forecasted 1,000 head of imports this year, an 87.5 percent decline in trade from significantly reduced 2014 import levels.

Pork

Russian pork imports in 2015 are forecasted to total 200,000 MT, roughly 60 percent less than revised 2014 import levels (i.e., 515,000 MT). Given the current economic situation in Russia, it is anticipated that consumers will decrease their consumption of red meats in 2015. Moreover, the decline in consumption is anticipated to largely come at the expense of traditionally more expensive imported product – given the increase in domestic production in recent years and, more importantly, the Russian ruble's decline in value against the dollar and Euro.

Russian pork imports in 2014 were significantly lower than they were in 2013 – 515,000 MT (40 percent lower than 2013 levels). This decline in imports was a result of restrictions imposed on certain foreign suppliers during 2014 (e.g., Belarus, the European Union, Canada, the United States, etc.), and the ruble's volatility towards year's end.

As for exports, Russian trade is traditionally quite small, and that trend is expected to continue in 2015 (i.e., 1,000 MT). In 2014, Russia exported nearly 1,000 MT of pork – the vast majority of which was shipped to fellow EAEU Member States (i.e., Kazakhstan and Belarus).

Russian Imports of Pork, PWE, Annual Series: 2009 – 2014 Quantity (MT) Incl. Major Suppliers in 2014

Partner Country

Calendar Year

2009

2010

2011

2012

2013

2014

World

673,906

704,237

746,657

822,977

675,652

396,242

Brazil

249715

223926

133050

122313

124,151

185,657

Canada

41,962

67,122

112,017

179,615

78,446

88,625

EU-28

247,715

303,926

356,856

309,169

378,915

32,738

Denmark

65,368

72,711

80,395

60,694

88,550

5,674

Hungary

3,290

4,105

5,558

9,187

22,040

4,998

Belgium

13,667

14,854

15,705

13,072

18,956

4,098

Germany

84,552

112,617

110,895

87,843

81,805

3,749

Belarus*

24,115

47,263

65,066

79,398

56,091

18,627♠

Chile

2,027

1,600

5,284

18,544

16,582

24,461

United States

107,676

59,405

58,016

87,942

5,828

19,950

Serbia

2,646

559

15,378

*Belarusian Exports to Russia as Reported by Belstat (♠ through October 2014)

Source: Federal Customs Service of Russia