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Global Opportunities For U.S. Seedstock

December 28, 2010
By: Kim Watson Potts, Beef Today
Eldon Krebs and Loading Boats dark
  
 
 

This May marked a milestone in Russia, with the first-ever bull sale taking place. Bill Davis,
co-owner of Rollin’ Rock Angus Ranch near Sidney, Mont., was in attendance for the event, representing the American Angus Association.

“It was a first-time event that was extremely interesting, and I came away from there with a feeling that there is tremendous opportunity for a lot of producers,” Davis says. “In Russia, they want to put together a program where they can feed their own people.”

To accomplish that, the government has stepped in to help cattle producers in that country purchase seedstock to build a quality beef herd. Russia continues to be in the process of transitioning from government-owned farms to individuals owning farms. In addition, dairy herds dominate the cattle inventories in that country, leaving a void for beef cattle.

“The goal is to use U.S. cattle to create a new beef industry in Russia. We have already taken the first steps by being the first to bring U.S. cattle to Russia. The end goal is making great beef available in Russia,” says Sergei Nitsenko, a Russian Angus seedstock producer.

Nitsenko and his son Ilia were the first to bring American Angus cattle to Russia, shipping in 2007 from Whitestone-Krebs in Gordon, Neb. Their ranch, Angus Genetics of Russia, has more than 6,000 head of U.S. Angus cattle to date.

The opportunities extend beyond a single breed and a single country. In 2008, a group of Hereford cattle were the first U.S. beef cattle to be imported to Kazakhstan in Central Asia. This past October, national news spotlighted the first shipment of breeding cattle in a $50 million
deal between Bismarck, N.D.–based Global Beef Consultants, LLC, and the Kazakhstan government. The agreement calls for 2,040 Angus and Hereford cattle to be shipped on a dozen flights to Central Asia.

Not a quick process. Lori Schott of the University of Minnesota Beef Team, which helped coordinate that first shipment, says these opportunities have taken years to develop and that relationships are key. Over the years, she says, the university has received many international guests. Back when the beef team was initially contacted by an investor about the possibility of sending seedstock overseas, the U.S. wasn’t allowed to import live cattle to Russia. But the ball started rolling, and soon the Russian government began supporting this type of investment in order to bring land back into agricultural production in that country.

Right now, the number of overseas producers is limited, but it’s expected to expand as more opportunities and government support occur.

“It will take some time for this to happen. It won’t happen overnight, but there is a growing interest in beef in Russia,” Nitsenko says. “It is possible that as more people in Russia become aware of the opportunities and the pitfalls of the industry, we will see an increase in the number of producers and the financing needed to fuel real growth. If this happens, it is likely that there will be an increase in the use of U.S. genetics in Russia.”

Red tape. In November, Jack Holden, a Hereford breeder in Montana, shipped a set of cows and bulls to Russia. He says it’s nice to have new opportunities, but adds that between shipping and the expected red tape, it’s a complex process.

“First, you have to go through a quarantine program, then there’s two ways to ship the cattle over there,” Davis explains. You can fly them there, which he says costs about $2,800 per 1,000-lb. animal. The other method is to use a boat, which takes two to four weeks to get the animals to Russia.

Once the cattle arrive, you need to be available to provide some expertise on breeding programs and other animal care management, especially if you can’t go there with the cattle. “You have to provide follow-up,” Holden says. “In these countries, there’s no knowledge base since the overall number of beef herds is small.”

Expertise and general cattle knowledge are commodities that are also in great demand for overseas beef herd development, Schott says.

She explains that since 2006 the Russian government has committed approximately $8 billion to import breeding cattle and to reestablish the beef and milk industries, but success has been limited due to the lack of skills and knowledge among Russian livestock producers. With the latest imports of cattle, U.S. producers and Extension personnel are going there to teach effective beef management practices, Schott says.

This will be an ongoing effort and Schott sees benefits for all involved. “The University of Minnesota Beef Team continues to be engaged in interactions with Russia’s evolving beef industry. Relationships have been established that support our land-grant mission and at the same time indirectly support trade of U.S. cattle genetics,” she says.

Davis says there is also interest in the data that breed associations can provide. There’s a bit of a learning curve, so continued communication and educational trips to Russia are essential to establishing a strong beef herd.

Expectations for the future of the cattle industry in Central Asia and Russia in particular are strong, especially for those getting in on the ground floor of this new beef herd. For Nitsenko, the plan is to create a vertically integrated operation that eventually will feed and slaughter the cattle it raises, but a winning team is required to produce results.

“Finding the right team is something we have worked very hard to do,” Nitsenko says. BT

FJ BT6 B10064

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FEATURED IN: Beef Today - December 2010

 
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