FAO Investment Centre

1 Russian Federation Russian Federation Meat sector review Meat sector review FAO Investment Centre COUNTRy HIGHLIGHTS. Please address questions and comments to: Investment Centre Division Food and Agriculture Organization of the United Nations (FAO). Viale delle Terme di Caracalla 00153 Rome, Italy Report No. 15. I3533E/1 Russian Federation: Meat sector review Report No. 15 - July 2014. FAO Investment Centre . Russian Federation Meat sector review Dmitry Prikhodko Economist, Investment Centre Division, FAO. Albert Davleyev National Meat Consultant, Investment Centre Division, FAO.

2 Country highlights prepared under the FAO/EBRD Cooperation Rome, 2014. The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) or the European Bank for Reconstruction and Development (EBRD) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO or EBRD in preference to others of a similar nature that are not mentioned.

3 The views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO or EBRD. FAO 2014. FAO encourages the use, reproduction and dissemination of material in this information product. Except where otherwise indicated, material may be copied, downloaded and printed for private study, research and teaching purposes, or for use in non-commercial products or services, provided that appropriate acknowledgement of FAO as the source and copyright holder is given and that FAO's endorsement of users' views, products or services is not implied in any way.

4 All requests for translation and adaptation rights, and for resale and other commercial use rights should be made via or addressed to FAO information products are available on the FAO website ( publications) and can be purchased through For further information on this publication, please contact: Director Investment Centre Division Food and Agriculture Organization of the United Nations (FAO). Viale delle Terme di Caracalla, 00153 Rome, Italy Cover photo: Dreamstime TABLE OF CONTENTS. Foreword v Acknowledgements vi Acronyms and abbreviations viii Executive summary xi 1 lobal medium-term meat market outlook G.

5 With focus on the Russian Federation 1. 2 The Russian Federation meat sector in brief 11. 3 Detailed review of the meat sector 25. 4 Meat processing 60. 5 Meat market concentration 68. 6 Meat trade 87. 7 Meat prices 96. 8 Policy 99. Annex 1 Distribution of poultry, swine and cattle inventories by region and type of farm in 2010 120. Annex 2 Main breeds and crosses 133. Annex 3 Meat production technologies 140. Annex 4 Applicable state standards in the Russian Federation 149. Annex 5 Profitability of poultry, pork, and beef production in various administrative subjects of the Russian Federation 153.

6 Annex 6 Leading meat brands 156. Annex 7 Major agroholdings and meat producers in the Russian Federation 158. Annex 8 Recent investments in the poultry sector 168. iii Annex 9 Broiler meat production (Far East Russian Federation): Investment model assumptions, results and sensitivity 171. Annex 10 Recent investments in the pork sector 174. Annex 11 Recent investments in the beef sector 178. Annex 12 Foreign meat trade 180. iv Foreword In recent years, the rise of agroholding farms, combined with strong consumer demand, higher incomes and substantial state support, have prompted an increase of meat production in the Russian Federation.

7 Despite its improved self-sufficiency in the sector, the country will remain one of the principle global meat importers in the foreseeable future. The reduced import tariffs following Russia's accession to the World Trade Organization (WTO) will put pressure on local meat producers to become more competitive. To do so, they will need to invest in the efficiency of primary production and higher food quality and safety standards. This review of the Russian meat sector, conducted by the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD), aims to inform policy makers and investors and promote a more efficient and inclusive meat sector.

8 It provides information on the role of the Russian Federation in global meat markets, on production and consumption of meat in the country, as well as relevant trade and policy measures. The review presents international comparisons on meat production efficiency, sector concentration and support measures. It also provides information on major players in the Russian meat market and identifies key sector constraints and opportunities. Readers interested in learning about mid-term prospects in the meat market are encouraged to read the latest version of the Agricultural Outlook jointly produced by the Organization for Economic Co-operation and Development (OECD) and FAO1.

9 1 v Acknowledgements This sector review was prepared by the Investment Centre Division of FAO in the context of the cooperation between FAO. and the EBRD. It was financed by FAO and EBRD's Special Shareholder Fund. Dimitry Prikhodko, Economist, Investment Centre Division, FAO, and Albert Davleyev, President, Agrifood Strategies, a Moscow- based agribusiness consultancy company, are the main authors of this report. Mr Prikhodko also led the team of other co-authors that contributed to the study. Inna Punda, Agribusiness Officer, Investment Centre Division, FAO, reviewed the initial version of the report and carried out desk research on Russia's meat trade with Ukraine and within the Customs Union of Belarus, Kazakhstan and the Russian Federation.

10 Vasyl Hovhera, Economist, Investment Centre Division, FAO, provided inputs on meat consumption and on the profitability of broiler meat production. Arianna Carit , Economist, Investment Centre Division, FAO, assisted in reviewing the study and prepared the executive summary. On the EBRD. side, Marta Bruska, Operational Leader for this project, provided leadership and coordination. The FAO/EBRD team would like to express its sincere gratitude to Natalya Zhukova, Senior Banker, Agribusiness, EBRD, Moscow, and Oona Schreiner, Banker, Agribusiness, EBRD, for their constructive comments on current issues and trends in the Russian meat sector.