The epidemic of African swine fever (ASF) in Russia continues to gain momentum, spreading to new regions of the country.
Last Friday, Russia’s largest pork producer Miratorg reported an outbreak of African Swine Fever (ASF) at a feeding station in the Belgorod Region in Central Federal District. According to the information-analytical agency EMEAT, Belgorod Region currently accounts for about a fifth of Russia’s total pig production – with the main production units of the country’s biggest pork producers, including Miratorg Agro-Belogoriya, Rusagro, located in the region. The share of the regions of the Central Federal District in January-October 2017 accounted for 55.7% of the total Russian pork production. The spread of ASF in this District could have potentially disastrous consequences for Russia’s pig production.
In the case of confirmation of the diagnosis, all the pigs at the feeding station will have to be culled.
In September, ASF was found at one of the sites of another large pork producer in the Belgorod region - GC Rusagro, which resulted in the company losing about 2,000 tons of pork.
In Russia, the first outbreak of ASF was registered in 2007. In 2017, the state has been notified 103 outbreaks in domestic pigs and 33 in wild boars.
Despite ongoing difficulties in containing the spread of ASF, strong consumer demand and low feed prices are expected to drive Russian pork production to 3 million MT in 2018, reports USDA Foreign Agricultural Service’s Global Agricultural Information Network (GAIN).
“Pork imports are expected to remain stable at 350,000 MT,” the report said. “Structural weaknesses in the Russian beef sector continue to limit growth. Russian beef production is forecast to reach 1.3 million MT in 2018.”
Production to Grow
Swine inventories are forecast to grow 1.6% in 2018 to 22.3 million head, the GAIN report said.
“Swine stocks at commercial farms are expected to grow even as animal numbers at smaller commercial and backyard operations continue to decline,” GAIN reported. “African Swine Fever (ASF) continues to spread across Russia, affecting even the best-protected commercial herds. The negative impact of ASF is expected to continue in 2018. With the third consecutive year of the grain crop exceeding 100 MMT, the ample availability of grains should contain feed prices, lowering overall production costs.”
Pork production is expected to grow as well, to 3 MMT (CWE) in 2018, a 1.4% increase from 2017, the GAIN report said. Analysts said producer prices for pork half-carcasses have risen due to increased demand for slaughter pigs. Consumption of pork has recovered after the crisis of 2015-2016 and the overall market outlook is favorable for pork.
“Antiquated independent farms and processing plants continue to struggle, but vertically integrated industry leaders are reporting improved margins from pork sales,” the GAIN report said. “As Russian production is beginning to exceed domestic demand, producers are looking for new markets. Competition among top Russian producers and importers is intensifying. This trend is expected to continue in 2018.”
Pork Trade and Restrictions
Pork imports are forecast to reach 350,000 MT (CWE) in 2018. A stronger ruble, growing demand for pork, and zero in-quota tariffs have been encouraging imports in 2017. Shipments from non-sanctioned suppliers are growing after three consecutive years of decline.
ASF constrains the potential of significant export development. Russian pork exports are forecast to remain at 25,000 MT (CWE) in 2018, unchanged from 2017, the report stated.
At the end of October, the Government of Russia expanded economic countersanctions on agricultural trade, banning imports of live swine and meat by-products from the countries that have applied economic sanctions against Russia, according to GAIN. Purebred breeding animals are exempted. Similar to the decree issued on June 30, 2017, Russian counter-sanctions will continue to influence trade in livestock and livestock products through December 31, 2018.
Pork prices will likely show stronger volatility compared to other meats (poultry and beef) due to stronger influence of currency exchange rates on pork imports and of the epizootic factors on the prices of domestic slaughter pigs
Russian 10 largest pork producers
pork production in 2016,thousand tonnes
Velikoluksky pig-breeding complex
Siberian Agrarian Group
Source: Information-analytical agency EMEAT (www.emeat.ru), which specializes in marketing research of the Russian agricultural market, meat price monitoring, due diligence, finding business partners and supporting investments in the agro-industrial complex of Russia.