Russian Meat Sector

Russian Federation Meat sector review
Russian Federation
Meat sector review
FAO Investment Centre
Russian Federation: Meat sector review

Report No. 15 - July 2014
Report No. 15
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
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http://www.fao.org/investment/en
I3533E/1/11.13
COUNTRy HIGHLIGHTS
FAO INVESTMENT CENTRE
Russian Federation
Meat sector review
Dmitry Prikhodko
Economist, Investment Centre Division, FAO
Albert Davleyev
National Meat Consultant, Investment Centre Division, FAO
country highlights
prepared under the FAO/EBRD Cooperation
Rome, 2014
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TABLE OF CONTENTS
Foreword
Acknowledgements vi
Acronyms and abbreviations
Executive summary
1
lobal medium-term meat market outlook

G
with focus on the Russian Federation
viii
xi
The Russian Federation meat sector in brief
11
Detailed review of the meat sector
25
Meat processing
60
Meat market concentration
68
Meat trade
87
Meat prices
96
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
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
Annex 10 Recent investments in the pork sector
iv
171
174
Annex 11 Recent investments in the beef sector
178
Annex 12 Foreign meat trade
180
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. 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 Russias 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. 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.
1 http://www.oecd.org/site/oecd-faoagriculturaloutlook/.
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 EBRDs Special
Shareholder Fund.
Dimitry Prikhodko, Economist, Investment Centre Division, FAO,
and Albert Davleyev, President, Agrifood Strategies, a Moscowbased 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 Russias meat trade
with Ukraine and within the Customs Union of Belarus, Kazakhstan
and the Russian Federation. 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. The authors would also like to thank Eugenia
Serova, Director, Rural Infrastructure and Agro-industries Division,
FAO, for her guidance and inputs at the initial stages of the review.
The report benefited from useful comments by Pedro Marcelo
Arias, Economist, Trade and Markets Division, FAO. Specials
thanks are extended to Hsin Huang, Secretary General of the
International Meat Secretariat (IMS), for his careful review and
valuable suggestions.
The authors would also like to thank Emmanuel Hidier, Senior
Economist, Investment Centre Division, FAO, and Claudio
Gregorio, Chief, Europe, Central Asia, Near East, North Africa,
Latin American and Caribbean Service, FAO, for their support and
guidance, and Genevieve Joy, Sarah Mercadante and Maria Ricci,
vi
Communications support, Investment Centre Division, FAO, for

assisting with the finalization and publication of the report. Maaike
Loogman, Joana Maison Aidoo, Eleonora De Feo and Monica
Romanelli, Investment Centre Division, FAO, provided excellent
administrative support throughout the course of this project.
vii
Acronyms and abbreviations
AI
AMS
ASF
avian influenza
aggregate measurement of support
African swine fever
EBITDA
earnings before interest, taxes depreciation and

amortization
EBRD
European Bank for Reconstruction and Development
EU
European Union
FAO
Food and Agriculture Organization of the United

Nations
FAPRI
Food and Agricultural Policy Research Institute
FIRA
First Independent Rating Agency
FMD
foot-and-mouth disease
FOB
free on board
FSSS
Federal Service of State Statistics
GDP
gross domestic product
GK
group of companies
GNI
gross national income
GOR
Government of Russian Federation
HACCP
hazard analysis and critical control points
HORECA retail, hotel, restaurant and catering services
viii
HS
harmonized system
IMS
International Meat Secretariat
IRR
internal rate of return
KMPP
Kornshtadt meat processing plant
LSE
London Stock Exchange
MPS
market price support
NPC
nominal protection coefficient
NPV
net present value
OECD
Organisation for Economic Co-operation and

Development
OIE
World Organisation for Animal Health
OJSC
open joint-stock company
OKVED
Russian Classification of Economic Activities
PPP
purchasing price parity
PSE
producer support estimate
PSF
private subsidiary farming
RAAS
Russian Academy of Agricultural Sciences
RUR
Russian rouble
SANPIN
sanitary norms and rules
SCT
single commodity transfers
SPS
sanitary and phytosanitary (measures)
TCI Investment Centre Division of the Food and Agricultural

Organization
TRQ
tariff-rate quota
USDA
United States Department of Agriculture
VAT
value added tax
VNIIMP
All-Russia Scientific Research Institute of Meat

Processing Industry
VNIIMS
All-Russia Scientific Research Institute Of Meat Cattle

Breeding
VNIIZZH All-Russia Scientific Research Institute of Animal

Protection
VPSS
Veterinary and Phytosanitary Surveillance Service
WB
World Bank
WTO
World Trade Organization
ix
Russian Federation - Meat sector review
Executive summary
Market development and business considerations

The Russian Federation in the global meat market
World food demand has seen massive changes, including a shift
from staple foods to animal proteins and vegetable oils. In the
short to medium term, this trend in global food demand will
continue. There will be an increased demand for vegetable oils,
meat, sugar, dairy products and livestock feed made from coarse
grains and oilseed meals.
There are numerous mid-term forecasts for the Russian Federations
meat sector. Most of them agree on the following trends: (i)the
consumption of poultry and pork meat will increase; (ii)the
consumption of beef will decrease or stabilize; and (iii)the Russian
Federation will remain a net importer of meat on the world market.
According to OECD and FAO projections, meat imports from the
Russian Federation will decrease from 3 to 1.3milliontonnes,
owing to an anticipated growth in domestic chicken meat and
pork production. The countrys share in global meat imports
is anticipated to decrease from 12percent in 20062010, to
4percent in 2021. While the Russian Federation will continue
to play an important role in the international meat market, it will
fall from its position as the largest meat importing country in
20062010 to the fourth largest global meat importer by 2021,
behind Japan, sub-Saharan African countries, and Saudi Arabia.
A growing and evolving domestic market
Between 2005 and 2010, the value of the Russian meat market
increased by 75percent, reaching about RUR930 billion in
current prices (equivalent to USD31 billion) due to growing meat
consumption. As a result of higher consumers income, meat
consumption in the Russian Federation has been on the rise since
the late 1990s. From 20052010, the per capita consumption of
all meats and meat products increased by 22percent to reach
64kg per person per year. Poultry meat consumption increased
by 31percent between 2005 and 2010 to reach 25kg per person,
while pork consumption increased by 38percent to reach 21kg
per capita. On the other hand, the per capita consumption of beef
xi
and veal decreased by 0.5percent, down to only 17kg, during the

same period.
Despite a significant anticipated growth by 2021, the per capita
consumption of meat in the Russian Federation will most likely
remain below that in the United States of America (USA), Brazil,
Argentina, Australia and the European Union EU-27, but will exceed
the consumption of meat in Ukraine, Mexico, South Korea and
China. In recent years, the Russian meat market has experienced
some notable transformations, in particular (i) a shift from beef to
poultry meat consumption; (ii) the progressive exit of household
farms from the market and the expansion of larger commercial farms
involved in meat production; and (iii) an increased supply of fresh,
chilled meat at the expense of frozen products. The emergence of
a large newly affluent urban population in Russian cities has also
boosted the development of the retail sector in the country, which
has influenced the way meat is sold and consumed. Chicken meat,
especially in the form of chicken meat cuts, has replaced beef in
everyday diets. However, pork consumption is likely to grow even
faster, as it is consumed in many processed ways: sausages,
smoked meat, meat delicacies and other value-added products.
From 2005 to 2010, total meat production increased from
7.7milliontonnes to 10.6milliontonnes, with chicken meat
production growing from 1.4milliontonnes to 2.8milliontonnes
and pork production increasing from 1.6milliontonnes to
2.3milliontonnes, according to official statistics. On the other
hand, beef production decreased by 5percent from 1.8 to
1.7milliontonnes during the same period, reflecting ongoing
adjustments in the closely related dairy sector.
The production, processing and supply structure of the meat
sector has shown a clear trend towards vertical integration, with
inefficient producers going bankrupt and an increased share of
commercial farms at the expense of smallholder producers. The
share of larger commercial farms in poultry meat production
increased from 79percent in 2005 to 88percent in 2010 and from
33 to 53percent in the pork sector, with the remainder being
produced by smallholder farms. As beef production is not generally
considered profitable by commercial farms, their share in cattle
meat production decreased from 36percent in 2005 to 32percent
in 2010, while the remaining share of smallholders and individual
farms increased.
xii
Decreasing role of imports

Imports of meat and edible meat offal decreased by 27percent
from 3.3milliontonnes in 2007 to 2.4milliontonnes in 2012,
mostly due to a drastic 64percent decrease in poultry meat
imports during that period. Prior to 2010, poultry meat was the
main kind of meat imported into the Russian Federation. It is now
the third most important type of imported meat after pork and
beef. Imports of edible meat offal for further processing have been
quite stable at about 300000 tonnes per year and are an important
source of raw material for meat processors.
Significant room to improve production efficiency
Although Russian meat producers have been effectively protected
from import competition by high-tariff and non-tariff barriers, some
improvements in meat production efficiency have taken place
thanks to an increase in competition among domestic producers.
For instance, broiler meat production indicators considerably
improved from 20052010 thanks to better feeding and nutrition,
as well as investment in the modernization of production facilities.
As a result, the average daily weight gain of broilers increased
from 32 grams in 2000 to 47grams in 2010. The feed conversion
improved from 2.7kg to 1.85kg of feed per 1kg of broiler.
However, only leading Russian producers such as Cherkizovo
or Miratorg reach feed conversion rates of 1.68 a level that
compares to what Brazilian producers achieve to date. Despite
certain improvements in livestock production performance,
Russian pork producers lag behind major pork producers from
countries such as the USA, Brazil, and the EU.
Strong meat prices will result in sustained export earnings for
major global exporters, which will encourage large meat exporting
countries to further invest in improving and expanding production
and exports despite the high prevailing incidence of food safety
and sanitary import bans. These investments in exporting countries
will likely put a greater pressure on Russian producers to improve
their production efficiency.
As consumers become increasingly aware of sanitary issues,
meat producers and processors in the Russian Federation will
need to pay more attention to ensuring food safety. Despite
improvements in this area and the adoption of the national hazard
analysis and critical control points (HACCP) standards, not all meat
producers meet national food safety regulations. Producers need
to pay particular attention to bacteriological contamination and
maximum residue levels. Independent research on salmonella
xiii
prevalence revealed that salmonella was present for 32percent of

whole chickens sold in the Russian Federation, compared to 4 to
16percent in the USA and the EU. Continuous improvements and
investment in food safety will be a key factor for local producers to
gain market shares.
Recent investments, risks and profitability
The Russian meat sector has recently experienced an investment
boom due to high profits and growing demand sustained by
market protection and state support programmes. According
to available information on ongoing and planned investments
for 20092014, the Russian meat sector has attracted a total of
USD7.2 billion in investment. Poultry production on its own has
attracted about 44percent of all meat sector investments, while
pork and beef production have attracted 33percent and 15percent
respectively. An additional USD540million in investment was
also observed in the meat processing sector. It should be noted,
however, that the recent global economic recession has forced
some Russian companies to review their ambitious business
expansion plans and put some meat production projects on hold.
Similar to those in other countries, Russian meat producers
face a number risks: (i)adverse production conditions and poor
infrastructure (low production efficiency, poor feed quality,
exposure to volatile feed grain prices, difficult access to
transportation infrastructure, power outages, etc.); (ii))animal and
poultry disease outbreaks and food safety hazards (avian influenza,
African swine fever, foot-and-mouth disease, etc.); (iii))investment
and financial risks (increase in interest rates, etc.); and (iv) policyrelated risks (changing government priorities, high level of market
protection, etc.). These are described in Chapter 2 of this report.
The analysis conducted in this review shows that, while
investments in new broiler meat production can still be profitable
in the Russian Federation under standard market assumptions on
local input/output prices and the cost of capital, such investments
have a rather long average payback period of nine years and are
highly sensitive to feed price increases. An increase in feed costs
of only 10percent would make these investments unprofitable.
At the same time, a reasonable improvement in feed conversion
would increase the investments internal rate of return (IRR) from
15to 18percent and decrease the payback period to eight years.
xiv
Foreseen meat processing consolidation

Russian meat processing, unlike poultry meat production, is
characterized by rather low consolidation owing to the countrys
vast national territory, consumers preferences for local regional
producers and trademarks, and a general lack of the processors
capacity to market brands at the national level. It is very likely that
sector consolidation will occur in the near future. In order to meet
its potential, the private sector needs to modernize and improve
its basic production efficiency. These improvements would require
substantial private investment in areas such food safety and
biosecurity, environmental sustainability through the introduction of
better livestock management practices, and improved breeding stock.
Policy considerations
The fast growth experienced by the meat sector in the Russian
Federation in recent years has been supported by policy
measures, including import tariffs and domestic support. Although
competitiveness features as one of Russias main agricultural
policy goals, the countrys agricultural support system has
been driven by a progressive policy orientation towards import
substitution and higher self-sufficiency in meat and other food
products. While livestock production may play an important role
in economic growth and the need for adequate investment in that
sector is clear, Russias food self-sufficiency approach may be
questioned from an economic point of view.
Meat market protection and support come at a high price
Russias agricultural policy objectives have been pursued at a
relatively high cost to Russian taxpayers and consumers. Most
support is provided through market price support, supply of inputs
and fixed capital (investment subsidies and interest rates), all of
which are among the most market distorting policy measures.
According to OECDs monitoring of annual monetary transfers from
consumers and taxpayers to farmers, measured as the Producer
Support Estimate (PSE), Russian producers of grains and oilseeds
the main sources of feed protein in the country appear to be
taxed. At the same time, annual transfers to domestic producers
of poultry and livestock averaged RUR227 billion (USD6,3billion)
throughout 20082010. More specifically, 20percent of gross
income received by beef and veal farmers, 45percent of incomes
from pork and 34percent of incomes from poultry meat came
from consumers and taxpayers. Russias main interventions in the
sector consist of market-price support. Due to tariff and non-tariff
xv
measures, domestic prices for beef, pork and poultry end up being
much higher that international reference prices.
Improving competitiveness
Russian meat producers have a favourable access to feed
grains and meals as the country is a net exporter of wheat,
barley, corn and sunflower meals and other compound feed
ingredients. Therefore, improving the competitiveness of Russian
meat producers primarily means bridging the gap between the
domestic and import parity prices. The gap between domestic and
international prices increased considerably from USD 470900 per
tonne of various kinds of meat in 2001 to USD9001200 in 2010.
Domestic pork prices were often twice as high as international
pork prices at import parity levels. Domestic beef appeared to be
more competitive with imports than poultry and pork.
Protectionist policies will not help the domestic meat industry to
become competitive in the long-term. While the level of domestic
market protection and state support remain very high in the
Russian Federation, other major meat producers, like the USA and
Brazil, have limited price-distorting support measures or, as it is the
case for the EU, tend to reduce their support measures to meat
producers.
WTO accession
The Russian Government managed to defend a substantial
domestic market protection level at World Trade Organization
(WTO) accession, including Tariff-Rate Quotas (TRQs) for poultry
meat and beef with high out-of-quota rates. For pork, the Russian
Federation has agreed to a TRQ of 400000tonnes for fresh,
chilled and frozen pork with a zero in-quota tariff. As of 1 January
2020, the Russian Federation will adopt a tariff-only regime for
pork with a bound duty of 25percent. Therefore, the domestic
pork market will be more open to import competition.
State support programmes
State support programmes focus on extending long-term credit
at low interest rates to livestock breeding and other regional
programmes. They have attracted many entrepreneurs. For
example, interest rate subsidies for livestock production from
the federal budget aimed at supporting the construction,
reconstruction and modernization of livestock and poultry
facilities totaled RUR2.36billion (USD66million) and attracted
RUR155billion (USD4,3billion) worth of credit to 492 projects
xvi
in 2010 alone. In 2011, overall state subsidies to the livestock and

poultry industries, disbursed under various support programmes,
amounted to RUR22.8 billion (USD636million). As domestic
meat markets appear to be highly distorted, the extent to which
investment decisions have been driven by rational business
considerations is unclear. Many companies also complain about
the excessive documentation requirements and the lack of
transparency in decision making by officials responsible for the
distribution of state support.
To ensure the long-term competitiveness of Russias meat sector,
it would be highly desirable to refocus domestic budget support
to food safety improvements, feed quality monitoring, research,
education, training and other non-distorting support measures.
Effective food safety vs. sanitary-based trade restrictions
While ensuring food safety is a paramount task for all
governments, it appears that the attention of Russias food
safety authorities primarily focuses on imported meat products.
Furthermore, some WTO member countries have pointed out that
Russias sanitary regulations regarding maximum residue levels are
often not scientifically based.
It would be highly desirable for the Russian Federation to build
a comprehensive national food safety monitoring system. This
system would monitor microbiological, antibiotic and other residue
levels on a continuous basis and keep track of improvements
in food safety over time, thus building consumer confidence
regardless of product origin.
As knowledge becomes increasingly important in the livestock
and poultry sectors, public investment in education and training
will also be critically important. For the moment, the lack of
professional skills at all levels from nutritionists to farm managers
often forces private companies to invest in their own educational
programmes. Public-private partnerships in the field of agricultural
education could also address this critical gap.
xvii
Chapter 1 - Global medium-term meat

market outlook with focus on the Russian
Federation
Production
Global demand for meats will increase and mostly stem from large
economies in Asia, crude oil exporting countries and Latin America
according to the FAO-OECD Agricultural Outlook (2012)2. Poultry
meat will lead this anticipated growth as the cheapest and most
accessible source of meat protein overtaking pork as the largest
meat sector by 2021 (see Figure 1).
Figure 1: World beef, pork and poultry production and forecast,
1998-2021
140
Forecast
million tonnes
120
100
80
60
40
20
Beef and veal (cwe)
Pig meat (cwe)
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
1998
Poultry meat (rtc)
Source: OECD-FAO Agricultural Outlook 2012.
High feed costs in 2010-2012, a slowdown in demand and weak

economic conditions combined to reduce producer returns in
the livestock sector, encouraging producers to reduce animal
inventories, which slowed total meat production in the years prior
2 This chapter includes findings from the FAO-OECD Agricultural Outlook and its
medium-term projections for the period 2012-2021. Because FAO and OECD
Secretariats revise projections on an annual basis, the readers are encouraged to
refer to the latest projections available. The outlook database, including historical
data and projections, is available through the joint OECD-FAO internet site: www.
agri-outlook.org.
to 2012. Higher producer prices, with feed costs easing in the

short term, can be expected to improve meat margins and set the
stage for some expansion in production of red meats and poultry
in 2012-2013.
It is anticipated that global production of beef, pork and poultry
meat will increase from 262million tonnes in 2005-2010 (average
annual) to 330million tonnes in 2021 (up 26 percent) in response
to growing demand. During the same period, production of the
same kinds of meat in the Russian Federation is anticipated
to increase from 6million tonnes to 9.4million tonnes (up
56percent). Because of anticipated increases in poultry meat,
the Russian Federation will increase its share in global meat
production from 2 percent in 2006-2010 (on average) to 3 percent
by 2021 (see Figure 2).
Figure 2: Global meat production, share of the Russian
Federations production and forecast, 2001-2021
350
250
200
234
262
314 319 325 330

298 303 309
278 282 286 292
150
100
8.6 8.7
9.0
9.2
9.4
0
21
20
20
19
20
18
20
17
20
16
Russian production
(left axis)
8.9
20
15
20
14
20
20
13
8.4
12
8.3
11
8.0
10
06
20
05
20
01
20
20
World production
(left axis)
7.7
20
7,3
6.0 7.3
4.6
20
20
50
percent
million tonnes
300
Share of Russian Federation

in production (right axis)

Note: The meat total combines beef, pork and poultry meat only.
Global bovine production, which has stagnated in recent years,

is anticipated to start growing more rapidly as herds rebuild.
However, poultry will likely remain the fastest growing sector
(2.2percent p.a.) and will produce the highest volume of all meats
worldwide by 2021.
Productivity growth throughout the global meat production chain
has been significant in recent years. Herds have improved through
better breeding and herd management practices, especially
improved feeding practices. These improvements have enabled
growth in meat production efficiency. Despite rising input costs,

meat production has grown about 300 percent in the past
50 years, and livestock inventories the number of cattle,
swine, chicken and ovine animals have grown by 57 percent,
137percent, 400 percent and 49 percent respectively. The change
in offtake3, or the quantity of meat produced per animal, has
therefore increased substantially over time.
Historical growth in offtake ratios has been high for a number of
emerging countries, particularly Brazil and China. In India and the
Russian Federation, growth in offtake ratios has been for pork
(see Table 1). The offtake ratios depend on many factors, such as
the type of meat production system (intensive, pastoral, etc.),
consumer preferences and other factors that vary greatly among
countries. For instance, offtake ratios and their growth appear very
low for some countries in Africa as animals may be kept for farm
and work purposes.
Apart from increased farm productivity, improvements in supply
chain management, in particular cold chain management, have and
will continue to have a very important impact on the growth of this
sector. This is especially true in many developing countries where
storage and transportation of meat have been limited.
3 Offtake ratios are computed as gross meat production divided by animal

inventories.
4
0.3
0.5
0.5
-1.7
0
-0.2
4.9
0.3
0.7
1.5
0
percent/yr
2012-21
Projected
111
153
139
122
144
130
108
122
144
83
174
kg/head
2005-09
Offtake
ratio
1.5
0.9
2.9
3.2
1
-0.2
4.2
1.2
5.3
2
percent/yr
1985-2011
Growth
1.2
0.5
1.5
0.7
-0.1
1.7
2.3
0.7
3.2
1.1
percent/yr
2012-21
Projected
Pork
4.6
7.7
8
13
14
9
9
7
kg/head
2005-09
Offtake
ratio
1.2
1.4
0.1
8.4
0.5
1.8
3.2
4.6
1.4
4.4
0.7
percent/yr
1985-2011
Growth
0.8
0.8
1.1
0.3
1.1
1.8
2.5
0.8
2.7
0.4
percent/yr
2012-21
Projected
Poultry meat
Note: Growth estimates for the European Union (EU-27) and the world are limited to the period starting from 1996, the Russian Federation from 1992.
0.3
0.8
120
42
1.1
-2.7
57
80
Source: OECD and FAO Secretariats.
World
South Africa
United States
of America
Russian
Federation
8.5
0.1
-0.3
55
91
133
China
EU-27
Japan
percent/yr
kg/head
0.5
1.3
2.5
0.1
1985-2011
2005-09
60
158
45
126
Argentina
Australia
Brazil
Canada
Growth
Offtake
ratio
Bovine meat
Table 1: Trends in meat offtake ratios in selected countries
Trade
The latest available OECD-FAO projections at the time of preparing
this report suggested that global imports of beef, pork and poultry
meat will increase from 24million tonnes per year (on average) in
2006-2010 to 31million tonnes in 2021, an increase of 27 percent.
The Russian Federation will decrease its meat imports from 3 to
1.3million tonnes in the same period (down 57 percent) due to
anticipated growth in domestic chicken meat and pork production.
The share of the Russian Federation in global meat imports will
also decrease from 12 percent in 2006-2010 to about 4 percent in
2021 (see Figure 3). From being the largest meat importers in the
world in 2006-2010, by 2021 the Russian Federation is anticipated
to move to the fourth position on the global import list after Japan,
the sub-Saharan African countries and Saudi Arabia (see Figure 4).
Figure 3: Global imports of meat, share of the Russian
Federations imports and forecast, 2001-2021
35
12
24
25
27
29
28
28
28
27
31
30
30
30
29
12
10
20 19
15
10
5
2.4
3.0
2.3
2.0
11 0
20 201
06
20 g 05
av -20
01
20 g
av
20
World trade
(left axis)
12
1.9
20
13
1.7
20
14
1.7
20
15
1.6
20
Russian imports
(left axis)
16
1.6
1.5
1.5
1.3
1.3
20
20
20
20
20
17
18
19
20
percent
million tonnes
30
14
13
21
Share of Russian Federation

in production (right axis)

Note: The meat total combines beef, pork and poultry meat.
Figure 4: Net meat trade balance in 2006-2010 and forecast for

2021 of major exporters and importers
Brazil
United States
European Union-27
Canada
Australia
Thailand
India
Argentina
New Zealand
Uruguay
-3 000
-1 000
Ukraine
Kazakhstan
Turkey
Malaysia
Indonesia
China
Republic of South Africa
Philippines
Egypt
Viet Nam
Mexico
Korea
Russian Federation
Saudi Arabia
Sub Sharan Africa
Japan
1 000
3 000
2006-2010 (average)
5 000
7 000
2021 (forecast)

Note: The meat total combines beef, pork and poultry meat.
The growth in world meat imports is forecast despite strong

anticipated meat prices through 2021. Population, income growth
and high-income elasticity of demand will drive meat imports of
developing countries.
Led mostly by an expansion of poultry and beef shipments, world
meat exports will increase to respond to the growing demand.
The bulk of the growth is expected to originate largely from North
and South America, which will account for nearly 70 percent of
the total increase in all meat exported by 2021. The two largest
contributors to export growth are the USA and Brazil, both of
which will strengthen their dominance in world meat trade. By
2021, the USA and Brazil will generate nearly 80 percent of the
expansion of world poultry trade.
Brazil, Australia, India, Canada, Argentina, New Zealand, Uruguay

and Paraguay will be the main exporters of beef. Japan, the
Russian Federation, the USA, Korea and Egypt will be its major
importers. It is also expected that Iran and Viet Nam will continue
increasing beef imports in the future.
The EU, USA, Canada and Brazil will remain the main exporters
of pork with Japan, the Koreas, Mexico, the Russian Federation
and the sub-Saharan Africa countries being the main buyers by
2021. As for poultry meat, Brazil, the USA, Thailand, the EU and
Argentina are expected to be the main exporters with the subSaharan Africa countries, Saudi Arabia, Viet Nam, Mexico and
China being the main poultry meat importers by 2021.
Consumption
World consumption of beef, pork and poultry meat will continue
to grow at one of the highest rates among major agricultural
commodities. Together with other factors such as changing
consumer attitudes and preferences and relative prices, overall
meat demand will be affected by two factors: population and
income growth. In the past 30 years worldwide population growth
contributed 60 percent to the overall growth in meat consumption
with the remaining 40 percent being attributed to an increase
of per capita income and per capita consumption growth. As
shown on Figure 5, average global meat per capita consumption
directly correlated4 with the per capita gross national income (GNI)
measured at the purchasing price parity basis (PPP).
4 The correlation index between per capita meat consumption and gross national
income (GNI) in 1980-2009 was 0.978 pointing to a very strong correlation.
Although the correlation was direct, it was less than proportionate. An average
of 4.79 percent annual increase in per capita GNI generated an average 1.06
percent annual increase in per capita meat consumption, as consumers were also
allocating income to other products and services.
12 000
43
10 000
38
8 000
33
6 000
kg
current international dollars
Figure 5: World per capita meat consumption and income,

1980-2009
28
4 000
23
2 000
0
2
2
2
2
2
1
1
1
1
1
1
1
1
1
80 982 984 986 988 990 992 994 996 998 000 002 004 006 008
19
PPP GNI per capita (left axis)
18
Consumption per capita (right axis)
Source: Authors calculations based on FAO Stat and World Bank Data.
It is expected that global per capita meat consumption will

increase until 2021 with poultry accounting for 70 percent of
anticipated growth (see Figure 6).
Growth in developing countries is forecast to capture 82 percent
of the additional global consumption by 2021. The per capita
consumption of meat in the USA, the EU and Japan is not
anticipated to change significantly from the levels observed in
2006-2010. However, it is anticipated to increase considerably in
Uruguay, Brazil, Argentina, Chile, Malaysia, the Russian Federation,
Ukraine and other countries, reflecting consumer income growth.
In Eastern Europe, consumption of red meat still has a substantial
growth potential and will also increase.
Figure 6: Annual per capita meat consumption in 2006-2010

and forecast until 2021
120
100
kg
80
97 97 93
90 87
83
60
40 75
70 64
61 60
97 87
20
34 34
25 23
50 50 38 44 46 41 42 41 38
35 33 31
18 19
Un
Ur
u
ite gua
y
d
St
at
es
Isr
ae
B l
Eu
Ar raz
ro
il
g
pe
an enti
na
U
Ru
ni
o
ss
ia Au n-2
n
Fe stra 7
de lia
ra
tio
n
Ch
M
i
l
al e
ay
s
Uk ia
ra
in
Ko e
Re
re
pu
bl
Ka Me a
ic
x
of nza ico
Sa kh
ut sta
h
n
Af
ric
a
Sa
ud Chi
i A na
ra
W Vie bia
or
tN
ld
av am
er
ag
Ja e
pa
Tu n
rk
Th ey
ai
la
nd
71 78 78 61 65
54 53 53 52 49 49
47 46
2006 - 2010 (average)
2021 (average)

Note: The meat total combines of beef, pork and poultry meat. Data may differ from
official consumption estimates made by the Russian Government provided in this report.
Uncertainties
The meat sector is highly sensitive to macroeconomic conditions
policy conditions and animal health and food safety issues; this
poses a significant risk to the validity of the projections provided
in this chapter. Changes in oil prices and civil unrest have the
potential to impact world meat trade. Animal diseases and changes
in food safety regulations have the potential to affect domestic
and regional meat production and consumers preferences. For
instance, the Russian Federation imposed sanitary restrictions
on meat imports from a number of Brazilian states in May 2011.
The ban resulted in a substantial contraction of bilateral trade on
beef and pork and the end of two years of almost uninterrupted
monthly increases of world meat prices.
Increasing consumer awareness of the livestock sectors use of
water resources, its contribution to greenhouse gas emissions
and animal welfare issues will also likely affect demand for
different kinds of meat, especially in developed countries. These
factors affecting demand also need to be considered by potential
investors.
It is currently expected that strong meat prices will result in

sustained export earnings, which will encourage large meat
exporting countries to further invest in production and exports
despite the high incidence of food-safety and sanitary import bans.
This investment in exporting countries will likely put increased
competitive pressure on producers in the Russian Federation as
the country is expected to liberalize meat imports in line with its
WTO commitments.
10
Chapter 2 - The Russian Federation meat

sector in brief
Importance of the meat sector for the economy
Agriculture accounted for about 6 percent of Russian Federations
gross domestic product (GDP) in 2010. The livestock sector
inclusive of all livestock, dairy and poultry accounted for about
50-55 percent of agriculture output with the remaining output
coming from crops and plant products (mostly grain, oilseeds,
pulses, fruits, vegetables, etc.). Beef, veal, pork, poultry, sheep,
goat and other kinds of meat accounted for about 38-43 percent of
overall livestock sector production in 2005-2010 and 19-23 percent
of the total agricultural production (see Table 2).
Table 2: Role of livestock and meat in Russian agriculture and
economy, billion RUR, 2005-2010
Indicator
2005
2006
2007
2008
2009
2010
21610
26917
33248
41277
38809
45166
1381
1571
1932
2461
2516
2619
6.4
5.8
5.8
6.5
5.8
711
806
929
1155
1277
1439
295
328
367
442
556
591
1.4
1.2
1.1
1.1
1.4
1.3
Meat, % ag output
21.4
20.9
19
18
22.1
22.6
Meat, % livestock sector
41.5
40.7
39.5
38.3
43.6
41.1
GDP
of which:
Agricultural products
Agricultural products, %
GDP
of which:
Livestock sector
of which:
Meat from livestock and
poultry
Meat, % GDP
Source: Based on Federal Service of State Statistics (FSSS) of Russian Federation.

Note: Found in Russian Classification of Economic Activities (OKVED), # 01.02, under
subsection DA 15.1 Production of meat and meat products.
11
The percentage of the population employed in agriculture

(including both crop and livestock production) declined from
10percent in 2005 to 8 percent in 2011 according to official
statistics (FSSS) as trade, finance, construction and other sectors
attract more employees.
According to official statistics, 606000 people were employed
in meat production in 20105. As their productivity increases, the
number of employees involved in meat production and processing
declines and incomes increase (see Table 3).
Table 3: Employees and incomes in meat and meat product
production, 2005-2010
2005
2006
2007
2008
2009
2010
Change
2011 vs.
2005
50
54
63
72
77
82
65%
Average number of all

employees,
thousand persons
1167
1003
888
695
639
606
- 48%
Average annual gross

income per employee,
RUR/month
3544
4515
5948
8583
10056
11294
219%
Payroll fund for all

employees,
RUR billion/year
Source: FSSS.
Note: Income in current prices.
The meat processing industry alone accounts for about 7 percent

of the 2.5million people employed in the countrys food processing
industry. The number of employees in the meat processing sector
increased from 165000 people in 2005 to 189000 people in 2010,
reflecting an overall expansion. This expansion underlines the
importance of the industry as a source of local job creation.
In addition to formal employment, raising livestock and poultry play
a significant role in informal or self-employment in the Russian
Federation as smallholder producers still account for a sizable
share in total livestock production. Despite the decreasing share of
smallholder farms in total livestock production from 54 percent
(2.7million tonnes of livestock in slaughter height) in 2003 to 34
5 Found in Russian Classification of Economic Activities (OKVED), # 01.02, under

subsection DA 15.1 Production of meat and meat products.
12
percent (2.5million tonnes) in 2011,compared with commercial

farms that increased livestock production from 2.2 to
4.8million tonnes small livestock producers are still an
important source of rural employment and incomes in the Russian
Federation. Poultry, pork and beef account for 91 percent of all
meat products in the Russian Federation (2010, FAO Stat) namely:
poultry meat for 38 percent of all meat output, pork for 32 percent
and beef and veal for 21 percent. According to national statistics,
mutton and lamb are important meats especially in the Southern
and North Caucasian Federal Districts. The latter types of meat
were not included in this review because sheep meat accounts for
only 2 percent, horse meat for 1 percent and other types of meat
for 4 percent of the nation-wide total meat output.
Meat market development and outlook until 2021

The Russian meat sector has been undergoing a major transition,
which is largely unprecedented in modern history and has followed
the breakup of the Soviet Union in 1991. The downward trend in
cattle inventories began in 1990. Cattle numbers declined from
59million heads to 28million heads in 2000 and then below
21million heads in 2010, thus registering a tremendous 65 percent
decrease in livestock numbers since 1990. This downward trend
has slowed in recent years, but it is still ongoing. Amongst all
transition economies in the EBRD regions of operation, only
Ukraine witnessed such a drastic decrease in the number of cattle
herds: from 25million heads in 1990 to 5million in 2010, or an
80percent decrease.
The decrease in livestock inventories can partially be attributed
to the adjustments in the closely related dairy sector. As farmers
increased productivity of the milk heard, they continued slaughtering
dairy and dual-purpose cows. Specialized beef production is almost
non-existent in the Russian Federation, so dairy and dual-purpose
cows slaughter has been reflected in lower cattle inventories and
decrease of domestic beef production potential. This downward
trend in cattle inventories inevitably resulted in decreased domestic
beef production and increased imports.
Swine inventories also decreased dramatically from 40million
heads in 1990 to 18million in 2000. But the downward trend
was reversed in 2005 owing to generous state support and trade
measures. Nevertheless, the Russian Federation still witnessed a
57 percent decrease in swine numbers from 1990 to 2010.
Poultry production has witnessed the fastest recovery during the
13
same period, because it is a sector that allows for a shorter payback

period on investments as compared with pork and beef production.
In 2006, poultry meat became the most important meat type
produced in the Russian Federation, and by 2010 farmers produced
180 percent more chicken meat than in the early 1990s.
There are number of outlooks on the short- and medium-term
perspectives of the Russian meat sector. These outlooks are
prepared at national and international levels and use different
approaches. Box 1 below briefly discusses the main sector
development forecasts available.
14
Box 1: Mid-term meat production forecasts for the Russian Federation and their
various sources
According to official statistics, production of all kinds of meat in Russia has been
growing fast while meat imports have decreased since 2009 (see Table 4). The Russian
Government, in its Strategy of Livestock Production Development in the Russian
Federation untill 20201, forecasts that the total production of all types of meat will reach
9.6million tonnes, imports will decrease to 0.6million and domestic consumption
will increase to 9.9million tonnes by 2020. The same strategy envisages that Russia
will export 0.6million tonnes of meat, including 400000 tonnes of poultry and
200000tonnes of pork (Table 4).
The latest available forecast by OECD-FAO at the time of report finalization2 suggested
that the Russian meat production (beef, pork and poultry) might increase to 9.4million
tonnes by 2020 an estimate very similar to the Russian Ministry of Agricultures.
The latest results of meat trade simulations conducted by FAO in February 2013
suggest that meat imports may decrease from earlier forecasted levels; however, it is
doubtful that the Russian Federation would be able to export 0.6million tonnes of all
kinds of meat considering its strong domestic demand.
In this review, forecasts from both the government of the Russian Federation and the
OECD-FAO Mid-term Agricultural Outlook are mostly used.
Similar to OECD-FAO Agricultural Outlook, there are other sources of mid-term market
outlook that are based on global partial-equilibrium econometric models. For instance,
the USDAs international baseline projections3, suggest that Russian meat production
will increase to 12.5million tonnes by 2020 (including 6.7million tonnes of beef,
2.4million tonnes of pork and 3.4million tonnes of poultry meat) while imports will
remain high at about 2million tonnes (e.g. will not show signs of drastic decrease and
will reflect more rapidly increasing domestic consumption).
Interested readers can also refer to the outlook by the Food and Agricultural Policy
Research Institute (FAPRI), which covers beef, pork and poultry sectors in the Russian
Federation and Ukraine among other countries.
1
Approved by the Order No. 267 by the Russian Federation Ministry of Agriculture, dated 10
August 2011; published by the Ministry of Agriculture of the Russian Federation in August 2011,
http://mcx.ru/documents/document/show/16974.77.htm, Russian version only).
May 2012, http://www.oecd.org/site/oecd-faoagriculturaloutlook).
2
(January 2013), available at http://www.ers.usda.gov/data-products/international-baseline-data
3
aspx.
15
Figure 7 shows a historical perspective of beef and veal, pork

and poultry meat production in the Russian Federation starting in
1998. It also provides a medium-term OECD-FAO meat production
outlook until 2021 based on the 2012 projections.
Figure 7: Russian Federations production of beef, pork and
poultry in 1998-2011 and mid-term outlook until 2021
4 500
4 113 10
9
3 179
3 500
3 000
3 1191
2 461
2 500
2 068
2 000
1 710
6
5
1 500
1 000
500
19
98
20
20
00
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
percent
thousand tonnes
4 000
20
20
Beef and veal (cwe) (left axis)
Pigmeat (cwe) (left axis)
Share of Russian Federation in world

beef and veal production (right axis)
Poultry meat (rtc) (left axis)
Share of Russian Federation in

world pigmeat meat (right axis)
Share of Russian Federation in

world poultry meat (right axis)
Source: OECD-FAO 2012.
Production of meat in the Russian Federation has been growing

fast while meat imports have decreased since 2009, according to
official statistics. This trend is expected to continue in the future
(see Table 4 and for more details Box 1).
Table 4: All meats supply and demand, thousand tonnes,
2005-2020
2005
2006
2007
2008
2009
2010
2015*
2020*
Production
4920
5209
5722
6202
6648
7090
8688
9636
Consumption
7505
7894
8505
9134
9072
9139
9678
9876
Import
2585
2685
2784
2935
2423
1930
1050
640
Export
19
100
600
Source: FSSS of Russian Federation, Meat Union of Russia and Meatinfo.

* Forecast from Strategy on Livestock Production Development in the Russian
Federation until 2020.
16
Overall, the Russian Federations consumption of all types of meat

increased by 21.8 percent from 7.5million tonnes in 2005 to
9.1million tonnes in 2010 which reflected higher consumer
incomes. According to official Russian statistics, the average
monthly nominal incomes rose 2.4 times, from RUR8176 in 2005
to RUR19960 per month in 2010.
In 2005-2010, meat imports decreased by 47.9 percent, from 2.6
to 1.9million tonnes (see Figure 8). This decrease was mainly
because of increased domestic production, shrunken poultry
meat imports in 2010 (see Table 5) and sanitary import restrictions
imposed by the Russian veterinary authorities.
10
80
76
74
72
6
5
70
68
4
3
66
64
62
1
-
60
2005
2006
Production
(left axis)
2007
2008
Import
(left axis)
2009
2010
percent
million tonnes
Figure 8: Russian Federations meat production imports and

levels of self-sufficiency, 2005-2010
58
Self-sufficiency
(right axis)
Source: FSSS of Russian Federation.
Table 5 and the analysis that follows provide a snapshot of poultry,

pork and beef and veal market development and trends and official
sector development forecasts.
As seen in Figure 9 below, poultry meat production increased from
1.5 to almost 3million tonnes between 2005 and 2010, growing
15 percent per year on average. Poultry imports during the same
period almost halved as a result of increasing domestic production,
import measures and changing consumer preferences.
17
Table 5: Supply and demand for different types of meat and its
forecast, thousand tonnes, 2005-2020
Poultry
Pork
Beef
Indicator
2005
2006
2007
2008
2009
2010 2015* 2020*
Production
1388
1632
1925
2217
2555
2847
3850
4251
Consumption**
2706
2906
3219
3438
3541
3512
4030
3941
Import
1318
1274
1295
1224
986
661
Export
Production
1569
1699
1930
2042
Consumption
2154
2361
2615
Import
585
662
Export
Production
240
90
***
60
400
2170
2331
2925
3389
2864
2836
2970
3165
3439
685
822
667
639
240
50
40
200
1809
1722
1699
1769
1741
1727
1715
1786
Consumption
2484
2456
2488
2643
2502
2463
2285
2286
Import
674
734
789
874
760
621
570
500
Export
19
Source: FSSS, Meat Union of Russia and Meatinfo.

* Forecast from Strategy on Livestock Production Development in the Russian
Federation until 2020.
** Consumption of meat and meat products calculated as raw meat equivalent. Data
exclude pork fat and edible by-products.
*** Other sources state 15000 tonnes.
18
4.0
80
3.5
70
3.0
60
2.5
50
2.0
40
1.5
30
1.0
20
0.5
10
2005
2006
2007
Production
(left axis)
Import
(left axis)
2008
2009
2010
percent
million tonnes
Figure 9: Russian Federations production, imports and

self-sufficiency in poultry meat, 2005-2010
Self-sufficiency
(right axis)
Source: FSSS of Russian Federation
Poultry inventories, slaughter and live weight (yield6) directly

influenced meat production, and Table 6 illustrates these relations
in the Russian Federation using chicken inventories and slaughter.
It is clear that the growth in chicken inventories and slaughter was
the main reason behind increased meat production. It should be
noted that the information provided in Table 6 includes all chickens,
those raised by private households for meat and eggs as well
as the meat received from spent hens at the commercial egg
production farms.
In six years, from 2005 to 2011, chicken slaughter increased by
91percent, while meat yield increased by only 13 percent, from
1.4 kg per head in 2005 to 1.58 kg per head in 2011. Broiler yields
are believed to have increased even more rapidly.
6 Meat yields indicate the carcass weight equivalent after animal slaughter (for cattle
or swine) or ready-to-cook equivalent for poultry meat.
19
Table 6: Chicken inventories, slaughter, yields and meat

production in the Russian Federation, 2005-2011
2005
2006
2007
2008
2009
2010
2011
Change
2011 vs.
2005
Chicken inventories
as of Jan. 1, mln
head
329
343
358
351
366
391
406
24%
Chicken slaughter,
mln head
96
108
125
132
151
166
184
91%
Chicken meat
production, mln
tonnes
1.35
1.58
1.87
2.00
2.31
2.56
2.91
116%
Yield, kg/head
1.40
1.47
1.50
1.52
1.53
1.55
1.58
13%
Source: FAO Stat based on official Russian statistics.

Note: Includes only chicken inventories and production.
The Russian Federations pork production expanded by 49 percent

from 2005 to 2010 and was accompanied by a 38 percent increase
in consumption. Imports continued to grow over the same period,
however, even if at the low pace of 9 percent. In 2010 imported
pork, which mostly goes for further processing, held 22 percent of
the domestic market share, compared with 27 percent in 2005.
3.5
80
3.0
78
2.5
76
2.0
74
1.5
72
1.0
70
0.5
68
2005
2006
2007
Production
(left axis)
20
2008
Import
(left axis)
2009
Self-sufficiency
(right axis)
2010
66
percent
million tonnes
Figure 10: Russian Federations production, imports and selfsufficiency in pork, 2005-2010
Similar to the poultry sector, the main sources of increasing pork

production in 2005-2011 were the rise of pig inventories and
slaughter. Pig inventories in the Russian Federation increased
from 13.4million heads in 2005 to 17.2million heads in 2011, or
by 28 percent. The increase in slaughter during the same period
was even more impressive at 59 percent (see Table 7). Although
slaughter yields have remained almost unchanged at 84 kilograms
per head, it should be noted that pork production efficiency has
improved. In 2005, the number of slaughtered animals exceeded
beginning pig inventories by 36 percent. In 2011, pig slaughter
exceeded beginning inventories by 69 percent, pointing to
intensified pork production, shorter growing cycles and faster
animal turnover in swine production facilities.
Table 7: Pig inventories, slaughter, yields and meat production
in the Russian Federation, 2005-2011
2005
2006
2007
2008
2009
2010
2011
Change
2011 vs.
2005
Pig inventories
as of Jan 1, mln
head
13.4
13.5
15.9
16.3
16.2
17.2
17.2
28%
Pig slaughter, mln

head
18.3
19.4
22.3
24.1
26.0
28.0
29.1
59%
Pig slaughter,
percent of
inventories
136
145
140
147
161
162
169
24%
Yield, kg/head
83
84
84
85
83
83
84
1%
1.52
1.64
1.87
2.04
2.17
2.33
2.43
60%
Pork production,
mln tonnes
Unlike the increase of domestic production of poultry and pork,

beef production has continued to decline. As can be seen in Figure
11, imports of beef experienced a peak in 2008 and then started
declining, which resulted in a decreasing beef supply.
21
3 000
74
2 500
72
2 000
70
1 500
68
1 000
66
500
64
2005
2006
2007
Production
(left axis)
2008
Import
(left axis)
2009
2010
percent
million tonnes
Figure 11: Russian Federations production, imports and level

of self-sufficiency in beef, 2005-2010
Self-sufficiency
(right axis)
The beef and veal production decline has reflected decreasing

cattle inventories and slaughter as indicated in Table 8. During the
period of 2005-2011, Russian farmers continued cattle slaughter
at a faster pace than the cattle heard was rebuilt owing to low
profitability of raising animals. From 2005 to 2011, there was a
decrease of three million cattle heads: a drop of 13 percent.
Another reason behind decreasing cattle inventories is ongoing
adjustments in the dairy sector. As cow yields increase and
feed conversion rates improve, farmers continue to decrease
the number of dairy cows. Since Soviet Union times (and, to a
considerable extent, now) beef has been a by-product of the milk
production. Despite some success of the federal programme
Development of meat cattle breeding in Russia for 2009-2012
and the launch of several big projects, the pure-bred beef cattle
inventories remain very low: between 450 and 500thousand
heads, according to different estimates.
The Russian beef sector has shown some signs of recovery in
recent years. Farmers tend to feed their cattle better and slaughter
them at higher slaughter weights. The average yield of cattle in
the Russian Federation increased from 168 kilograms per head in
2005 to 190 kilograms in 2011: a 13 percent increase as indicated
in Table 8.
22
Table 8: Cattle inventories, slaughter, yields and beef and veal

production in the Russian Federation, 2005-2011
2005
2006
2007
2008
2009
2010
2011
Change
2011 vs.
2005
Cattle inventories
as of 1 Jan, mln
head
23.0
21.5
21.5
21.5
21.0
20.7
20.0
-13%
Cattle slaughter,
mln head
10.7
9.6
9.5
9.6
9.4
9.3
8.6
-20%
Yield, kg/head
168
177
178
184
185
185
190
13%
1.8
1.7
1.7
1.8
1.7
1.7
1.6
-9%
Beef and veal

production, mln
tonnes
Summary of main risks and opportunities in the meat

industry
Table 9 summarizes the industrys main risks, opportunities and
risk mitigation options. The types of risks are divided into the
following broad categories: production and infrastructure, animal
disease and epizootic situation, investment-related and policy.
Table 9: Main risks, opportunities and risk mitigation options
in the Russian meat sector
Production/Infrastructure
Type
of
risk
Risk description
Possible consequences
Mitigation and
opportunities
high volatility in feed prices
additional costs for projects

startup development
vertical integration with

feed production
poor quality of purchased

feeds
decreasing margin and lack

of working capital
feed price risk hedging for

outsourced grain/feed
lack of experience and

knowledge of key staff and
(nutrition, vet services,
management, etc.)
low quality/food safety of

the final product
investment in staff training

and education, outsourcing
of key services to result in
better production indicators
poor infrastructure
(electricity outages, road
transportation blocked in
winter, etc.)
low competitiveness and

loss of market share
lack of effective food safety

control/monitoring system
inability to improve feed

conversion and other
efficiency indicators
location in areas with welldeveloped infrastructure
23
Risk description
Possible consequences
Mitigation and
opportunities
African swine fever
risk of flocks/heard
depopulation
investment in veterinary
services and biosecurity
measures
avian influenza
loss of investment
work with local

communities to create
buffer zones around
production facilities
Epizootic
Type
of
risk
trade disruptions and bans

other diseases
significantly delayed
payback period
disease
Policy
Investment and financial
significant additional
expenditures on eradication
leading to bankruptcy
long payback periods,
especially in cattle/beef
production
limited expansion capacity
cancellation or reduction
of current interest rate
subsidies due to policy
changes
reduced profitability,
increased costs
increase of credit interest reduced or negative margins

and higher risks of loan
rates
defaults
legally binding
commitments from
government/local
authorities and banking
sector
lack of operating capital due

to financial sector crisis.
inability to purchase inputs

and feed in a timely manner
(reduces production
volumes and cash flow
income to critical levels)
reduced availability of public

funding due to lower budget
revenues or public focus
shifting to other priorities
higher interest rates and

lack of state co-financing
investment planning
assuming stiffer import
competition and minimum
tariff protection
the Russian Federations

accession to the WTO and
decreased import tariff
protection
lack of operating and

investment capital as
financial institutions shift
focus away from agriculture/
meat sector
investment planning
without price support
payments
the need to restrict overall

domestic support in line
with WTO commitments
reduced sales and incomes
changes in standards and

regulations (environmental,
waste treatment, food
safety, animal welfare)
slow growth, extended

payback or bankruptcy
Source: Author/LMC International, based on calculations and estimates.
24
investment planning
at market rather than
subsidized interest rates
plan investment
considering the latest
environmental, animal
production and advanced
food safety systems
Chapter 3 - Detailed review of the meat

sector
Meat production structure: increasing the role of
commercial farms
There are three main types of farms that raise livestock and poultry
in the Russian Federation: agricultural enterprises (commercial
farms), individual (peasant) farms and rural households
(smallholders that produce food for own consumption and often
have extra non-farm income). The recent growth in livestock and
poultry inventories has been accompanied by the changing roles
of different farm types. The role of commercial meat producers
has increased considerably owing to their better access to state
financing, economy of scale, growing industry consolidation, the
decreasing role of traditional meat markets and the increasing role
of modern retail chains. The latter demands steady meat supplies,
high quantities, uniform quality and food safety standards. Most of
the support programmes described later in this report require that
farms be registered as official businesses to receive state support
or qualify for an interest rate subsidy on credit.
Rural households decreased their inventories of all kinds of poultry
(chickens, turkey, ducks, geese, etc.) from 113million head in
2005 to 97million head in 2010 (down 15 percent), and agricultural
enterprises increased their poultry numbers from 241million head
in 2005 to 348million during the same period (up 44 percent).
Correspondingly, the share of agricultural enterprises in poultry
inventories increased from 68 percent in 2005 to 77 percent
in 2010 while the share of rural households decreased from
32percent in 2005 to 21 percent in 2010 (see Figure 12).
Alongside economic reasons, social and demographic factors
such as an ageing rural population and migration of young people
to urban areas cause this decrease of livestock and poultry
production by rural households. Gender does not play a significant
role in the development of the meat sector in the Russian
Federation and was not reviewed in this report.
The individual (peasant) farms have maintained 1 percent of poultry
inventories in 2005-2010 (see Figure 12). The outgrowing farming
schemes involving individual farmers contracted by meat processors
25
to raise chickens are not popular in the Russian Federation because

individual farmers are not considered to be reliable suppliers. This
may explain their low share in total poultry inventories.
Figure 12: Structure of poultry inventories by type of farm,
2005-2010
100
32%
31%
28%
1%
1%
1%
68%
68%
71%
percent
80
25%
23%
21%
1%
1%
1%
74%
76%
77%
60
40
20
2005
2006
Agricultural enterprise
2007
2008
Individual (peasant) farm
2009
2010
Rural households
(smallholder)
While poultry production structure varies considerably by

region, each subsector has its peculiarities. Raising chickens in
rural households is popular in all rural territories of the Russian
Federation as hens are mostly used to supply eggs for in-house
consumption. However, in southern regions (Rostov, Krasnodar
and Stavropol and North Caucasian Republics) backyard
commercial broiler farms supply a considerable volume of broilers,
turkeys, ducks and geese to the local meat markets. This is
explained by availability of feed wheat, corn, sunflower and other
feeds at affordable prices, favorable climate and a tradition of
raising backyard poultry. Similar backyard production is registered
in the Republics of Tatarstan and Bashkortostan. The regional
production structure is described later in this report.
Similar trends were observed in the structure of pig inventories
in 2005-2010: agricultural enterprises increased pig inventories
from 7million to 11million heads (up 48 percent) while rural
households decreased, from 6million to 5.6million heads (down
5.5 percent). Therefore, rural households share of total pig
inventories decreased by 9 percent from 2005 until 2010 (see
Figure 13). Individual farms also played a more important role in
26
pork production than in poultry as they accounted for 4 percent of

all pig inventories.
Figure 13: Structure of pig inventories by type of farm,
2005-2010
100
percent
80
43%
43%
60
38%
41%
4%
5%
5%
5%
53%
52%
53%
57%
40
20
0
2005
2006
2007
2008
34%
33%
4%
5%
62%
63%
2009
2010
Rural households
(smallholder)
The cattle inventories held by both major types of farms continued

to decline. Agricultural enterprises decreased cattle numbers from
11million in 2005 to 9.3million heads in 2010 (down 16 percent).
Rural households also continued cattle slaughter although at a
slower pace: from 9.6million heads in 2005 to 9.2million in 2010
(down 4 percent).
An emerging growth of individual farmers as producers is the main
difference in cattle inventories and their structure as compared
with poultry and swine. The cattle inventories held by the individual
farmers increased from 0.9million heads in 2005 to 1.5million
in 2010 according to official Russian statistics (up 58 percent).
Correspondingly, the share of individual farmers in total cattle
production increased from 4 percent in 2005 to 7 percent in 2010
(see Figure 14).
27
Figure 14: Structure of cattle inventories by type of farm,

2005-2010
100
percent
80
51%
49%
48%
48%
46%
46%
4%
5%
6%
6%
7%
7%
51%
49%
48%
47%
46%
46%
60
40
20
0
2005
2006
2007
2008
2009
2010
Rural household
(smallholder)
As already mentioned, raising and slaughtering cattle is closely

linked with dairy herd replacements (Box 2). Cattle inventories
diminished as milk yields and production increased and farmers
reduced cow numbers. In 2010, an average milk yield per cow in
the Russian Federation was about 3800 kg per year, or 18 percent
more than in 2005. The increase in cow milk productivity occurred
despite the decrease of cattle inventories from 9.6million cows in
2005 to 8.3million in 2010 (down 13 percent).
Box 2: Beef cattle production perspectives
According to the state scientific institution All-Russia Scientific Research Institute Of
Meat Cattle Breeding, only about 5 percent of local beef comes from beef cattle or
cross-breeds (more information on cattle breeds in the Russian Federation is provided in
the Annex 2 of this report).
The Ministry of Agriculture of the Russian Federation identified two areas of
improvement in its "Development of Beef Cattle in Russia 2009-2012" programme: (i)
intensification of the use of cattle feedlots to increase daily weight gains and slaughter
weights and decrease cattle age at slaughter to below 24 months; and (ii) increase in
cattle inventories.
With regards to the beef market, high quality beef has become available only recently
when the country started importing beef from the USA, Brazil, Australia, the EU and
Argentina. Beef production will likely continue to develop as a niche market limited to
the demand of high-income consumers in big cities.
28
Meat supply
In 2010, the Russian meat market (calculated in raw meat
equivalent as domestic production, added to by meat imports and
subtracted from by exports) increased by 22 percent as compared
with 2005 (see Table 10).
Table 10: Meat market, thousand tonnes
Meat type
2005
2006
2007
2008
2009
2010
Change
2010 vs.
2005
Poultry
2706
2906
3219
3438
3541
3512
+30%
Pork
2154
2361
2615
2864
2836
2970
+38%
Beef
2484
2456
2488
2643
2502
2463
-0.8%
161
171
183
189
193
194
+20.5%
7505
7894
8505
9134
9072
9139
+22%
Other kinds of
meat**
Total

* Calculated as production + imports - exports = consumption.
** Lamb and goat meat.
Within this trend, the poultry meat and pork subsectors

experienced the highest growth rate of 30 and 38 percent
respectively. Changes in the beef supply were insignificant
(down 0.8 percent).
The major changes in the structure of the Russian meat market
occurred because of the expansion of poultry production and
reduction of beef supply (see Figure 15).
29
Figure 15: Recent developments in the meat market structure,

2005-2010
2%
2%
2%
2%
2%
2%
36%
37%
38%
38%
39%
38%
29%
30%
31%
31%
31%
33%
33%
31%
29%
29%
29%
28%
27%
2005
2006
2009
2010
100
90
80
percent
70
60
50
40
30
20
10
0
Veal & beef
2007
Pork
2008
Poultry
Other types of meat
In 2010, the meat market value in the Russian Federation increased

by 75 percent as compared with 2005, reaching about RUR930
billion (in current prices). The pork market was a growth leader
expanding at a 94 percent by value because of demand and price
increases. Poultry and beef market turnovers grew at an equal
pace of about 65 percent (see Table 11).
Table 11: Meat market value, million RUR, excl. value added
tax (VAT), 2005-2010
Change
2010 2010 vs.
2005
Meat type
2005
2006
2007
2008
2009
Poultry
150.7
148.9
181.8
216.7
252.7
248.9
+65%
Pork
177.4
197.8
206.4
294.3
324.8
343.6
+94%
Beef
191.3
216.6
221.9
272.6
287.6
314.0
+64%
11.1
15.3
16.4
20.1
24.6
22.1
+99%
530.4
578.5
626.6
803.8
889.8
928.6
+75%
Other kinds
of meat
Total

Note: Calculations based on slaughter weight and producers prices.
30
While poultry is an absolute leader on the Russian meat market

for volume, it held 27 percent share by value in 2010. Pork held
38percent of the total meat market in 2010 and was followed by
beef at 33.8 percent (see Figure 16 and Figure 17).
Figure 16: Meat market structure, 2010, in value
2.1%
Poultry
27.0%
Pork
Beef
38%
Other types of meat
33%
Figure 17: Meat market structure, 2010, in volume

2.1%
27.0%
26%
Poultry
Pork
Beef
Other types of meat
38%
31
Meat consumption
According to FAO Stat, per capita meat consumption in the
Russian Federation started declining in the 1990s. It bottomed out
in 2000 when about 40 kg of all kinds of meat were consumed per
person as compared with more than 60 kg consumed in the early
1990s. Since 2000, meat consumption has increasingly reflected
higher consumer incomes and overall economic growth driven
by high oil and gas prices (see Figure 18). In 2005, the Russian
Federation became a high-income country according to the
World Bank. Meat consumption and sales increased at a pace of
12percent p.a. on average during 2005-2010.
Figure 18: Per capita meat consumption and GNI in the
Russian Federation, 1992-2009
20 000
60
kg
10 000
20
5 000
1992
1994
1996
1998
2000
Meat consumption per capita

(left axis)
2002
2004
2006
2008
PPP GNI per capita

(right axis)
Source: FAO Stat and World Bank Data.
In 2010, Russian consumers ate about 9.1million tonnes of meat

each year. This figure corresponds to about 64 kilograms per capita
as compared with 52 kg per capita in 2005. Figure 19 describes
the estimated per capita consumption of the main types of meat.
32
current international dollars
15 000
40
Figure 19: Per capita meat and meat products consumption in

the Russian Federation, calculated in fresh meat equivalent,
2005-2010
70.0
1.1
kg/year
50.0
40.0
1.3
1.4
1.4
18.6
17.6
17.3
20.2
20.0
20.9
24.2
25.0
24.7
2008
2009
2010
1.3
60.0
17.4
30.0
15.1
1.2
17.2
16.6
17.5
18.4
20.0
10.0
0.0
18.9
2005
20.4
2006
Poultry
22.7
2007
Pork
Beef
Other types of meat
According to official statistics, the share of other kinds of meat

such as lamb, mutton and rabbit in overall meat consumption
was not important.
Although meat consumption has increased considerably, it still
has not reached the so-called rational norm of consumption (in
Russian, ) of 75 kg per capita
per year7 established by the Ministry of Health of the Russian
Federation.
Compared with other countries (see Figure 6), the growth potential
for meat consumption in the Russian Federation is significant.
The growing urban population in the Russian Federations cities
provided a big boost to the development of the retail market in the
country; the growth of meat sales was one of the results of this
change. Consumer preferences have also revealed the following
main trends:
7 Order No. 593-n of 2 August 2010. On approval of recommendations on rational

norms of food products consumption corresponding to existing requirements
ofhealth nutrition.
33
consumers look for value-added cuts rather than whole birds;

consumers tend to prefer chilled meat rather than frozen;
b
eef is no longer a meat for everyday consumption, unlike in
Soviet times;
chicken meat has taken the place of beef in everyday diets;
a s the poultry meat market becomes saturated, pork
consumption grows (including pork that is further processed
into sausages, smoked meat, meat delicacies, etc. with a
longer shelf-life);
c onsumers increasing awareness of food safety issues (see
Box 5 on food safety).
Seasonality of consumption
Each type of meat has its own seasonality of consumption,
and the demand for meat derives from the final meat products
consumption. Table 12 provides a summary of the main seasonal
consumption patterns in the Russian Federation.
Table 12: Seasonal meat consumption patterns
Type of meat
Product
Season
Poultry
Whole chickens
Year-round + holidays
Poultry
Chicken cuts
Year-round + summer
Poultry
Turkey
Year-round, New Years Eve
Pork
Bone-in
Autumn-winter-spring
(except during Lent)
Pork
Half-carcass
Year-round
Pork
Boneless
Year-round + holidays
Pork
Neck (collar)
Summer
Beef
Year-round (less in summer)
Further processed
Sausages,
franks, hams
Year-round
Further processed
Delicacies
Weekends and holidays
Source: Piter Consult, ROMIR and GFK research companies.
The seasonality of consumption also affects imports. The peak of

meat demand falls in October, November and December. It coincides
with the slaughter season for cattle and pigs in rural households
and the upcoming New Year and Christmas festivities. Purchasing
volumes consequently decline in January. The lowest consumption
levels for all types of meat is registered during Great Lent, which
34
usually takes place in late February early April, and late summer
early autumn (August and September) when the domestic market is
abundant with less expensive fruits and vegetables.
Household disposable income and consumption patterns
The share of expenses on meat and meat products in the overall
purchase basket decreased from 10.7 percent in 2006 to 9.6 percent
in 2010 according to official statistics. However, compared to overall
food consumption, which saw a decrease in expenditures from
43percent in 2006 to 38 percent in 2010, meat share in consumer
expenditures declined at a slower pace (see Table 13).
Table 13: Consumer expenditures in the Russian Federation,
2006-2010, percent (current prices)
Name of groups
2006
2007
2008
2009
2010
100.00
100.00
100.00
100.00
100.00
Food products
42.71
40.21
39.11
37.70
37.97
- incl. meat products
10.71
10.28
9.81
9.59
9.64
Non-food products
33.74
35.13
35.99
37.37
36.25
Services
23.55
24.66
24.90
24.93
25.78
All goods and services
On average, Russians spend about 8.1 percent of their total

income on meat and meat products (see Table 14).
Table 14: Share of expenses on meat and meat products in
household incomes, 2010
Units
All
households
Incl. in
urban
areas
Incl. in
rural
areas
Aggregate income
per member of the
household
RUR/
month
12688
14357
10129
Expenses for meat and

meat products
RUR/
month
1034
1094
869
percent
8.1
7.6
8.6
Index
Share of expenses for

meat and meat products
in aggregate income
35
A significant share of food products consumed by households

(vegetables, fruits, preserved and canned products, meat, dairy,
eggs, etc.) often comes from their own production, especially in
the case of households located in rural areas.
According to the official strategy of meat sector development,
the consumption of meat and meat products is expected to
reach 71.2kg per capita by 2015 and 75.28 kg by 2020. Poultry is
expected to lead the market with 38 percent on volumes, followed
by pork (36 percent) and beef (23 percent), while other meat
types will hold a marginal 3 percent. It should be noted, that this
official forecast is based on recent domestic consumption trends,
anticipated production growth and import substitution goals
set by the Russian Federation. Its ultimate goal is to reach the
rational meat consumption norm of 72 kg of meat per person
per year. It is natural that these official forecasts exceed the midterm forecasts presented earlier in this report as the latter also
consider global macroeconomic development indicators that affect
production, consumption and prices in the major producing and
consuming countries.
Geography of poultry and livestock inventories

Meat production in the Russian Federation is mostly concentrated
in the southwest and, to a certain extent, central parts of the
country. Readers interested in more information on production
structure, processing, investment and issues of the meat value
chain in this important meat-producing region may also refer to
the chapter on the meat food chain in southern Russian Federation
in the FAO-EBRD Analysis of the Agribusiness Sector in southern
Russian Federation9.
The highest concentrations of poultry inventories are in Central
(29percent), Volga (20.2 percent) and Southern (13.1 percent)
Federal Districts (see Figure 20). The specific regions with the
highest poultry stocks are Belgorod (10.1 percent), Rostov
(5.4percent) and Leningrad (5.1 percent).
8 78.6 kg according to the Russian Meat Union.

9 http://www.fao.org/investment/tci-publications/publications-detail/en/c/165747/.
36
Figure 20: Share of Federal Districts in poultry inventories

Far Eastern
Siberian
Central
2%
21%
Ural
Volga
29%
9%
9%
20%
6%
N. Western
13%
N. Caucasian
Southern
As pork production is mostly dependent on the availability of

feed grains and protein meals, raising pigs is popular in the
southwestern part of the Russian Federation (see Figure 21).
Figure 21: Geographical distribution of pig inventories in the
Russian Federation, 2011
thd Heads
0-4
40.1-90
90.1-160
160.1-300
300.1-500
over-500.1
The highest concentrations of pork inventories are in the Central

(34.6 percent), Volga (21.4 percent) and Siberian (17.6 percent)
37
Federal Districts (see Figure 22). The regions with the highest pork
stocks are Belgorod, Krasnodar and Tatarstan.
Figure 22: Share of Federal Districts in pig inventories
Far Eastern
2%
Siberian
Central
18 %
Ural
35 %
7%
4%
21 %
N. Western
Volga
2%
11 %
Southern
N. Caucasian
For many years, Belgorod Region has been the Russian

Federations leader in development of industrial pork and poultry
production. This is mostly owing to a favourable investment
climate established in the region, which has attracted big projects
and large agricultural holdings, in addition to the fertile soil and
favourable climate.
Livestock farming is mostly concentrated in the southwestern
part of the country. The largest cattle inventories are in the Volga
(30percent), Siberian (21 percent) and Central (14 percent)
Federal Districts. Cattle farming is less popular in the Far Eastern
(2percent), Northwestern (4 percent) and Ural (6 percent) Federal
Districts (see Figure 23 and Figure 24).
38
Figure 23: Geographical distribution of cattle inventories, 2011
thd heads
0-100
100.1-200
200.1-300
300.1-500
500.1-900
over 900
Figure 24: Share of Federal Districts in cattle inventories

N. Western
Central
4%
Siberian
14%
21%
2%
Ural
11%
6%
12%
Far Eastern
N. Caucasian
Southern
30%
Volga
Within the Russian federal districts, the leading regions in terms

of cattle numbers are Bashkortostan (6.3 percent), Tatarstan
(5.4percent), Dagestan (4.5 percent) and Altai Territory (4.5 percent).
Bashkortostan and Tatarstan primarily raise dairy cattle, while
Dagestan raises cattle for beef. The majority of Dagestans cattle
is concentrated in rural households; only 11.6 percent of cattle in
39
the region is in agricultural enterprises. The majority of cattle in

specialized beef farms is concentrated in the Southern (42 percent),
Siberian (18 percent) and Ural Federal Districts (12 percent)10.
Detailed information on poultry, swine and cattle inventories by
each region and type of farm is provided in Annex 1.
Primary production efficiency

Poultry production performance indicators considerably
increased in 2005-2010 thanks to improved feeding and technical
modernization. In 2000, the average daily gain of broilers was 32g.
In 2010, it increased to 47g. The feed conversion also improved
from 2.70 kg to 1.85 kg of feed to produce 1 kilogram of broiler.
The leading companies can achieve a feed conversation ratio of
1.78-1.76 kg, and the best farms manage to decrease it to 1.68 kg.
Despite certain improvements in live production performance,
Russian poultry production is still far from being competitive with
the major poultry producers, such as the USA, Brazil, Argentina
and Thailand, without import measures (see Table 15).
Table 15: Broiler feed, live costs and processing wages
compared to other countries
Broiler feed
USD/tonne
Cost live
broiler
USD/kg
Processing
wage (cost of
labour)
USD/kg
USA
240
0.77
2500
Brazil
260
0.71
400
Argentina
240
0.69
440
EU
390
0.92
3000
Russian Federation
380
0.91
440
China
410
0.96
220
Thailand
340
0.86
250
India
300
0.85
100
Source: Rabobank, 2009.
10 Report of Ministry of Agriculture On implementation of the program of meat

cattle breeding, 2010 data.
40
Further improvements made by the Russian Federation especially

in the areas of reducing costs of hatching eggs, improving yields
and feed conversion efficiency are evident in a detailed cost
analysis provided in Table 16.
Table 16: Broiler production cost comparison in the Russian
Federation and two other countries
Russian Federation
Cost of item (in RUR)
Hatching egg
USA
Bulgaria
Company A
Company B
5.0
5.8
8.34
7.8
Hatch, percent
84.1
80
82.5
79.4
Cost of hatching egg per final chick
5.95
7.25
10.11
9.82
Cost of day-old chick (DOC) and delivery
1.65
2.2
2.34
1.72
TOTAL cost of DOC
7.60
9.45
12.45
11.54
Livability, percent
95.6
94
93
93.1
Cost of final chicken, per head
7.94
10.05
13.39
11.96
Feed cost, per 1 kg
7.92
10.20
10.56
9.92
Chicken weight to slaughter, kg
2.68
2.03
2.00
1.92
Feed conversion
1.98
1.82
1.94
1.99
TOTAL cost of feed and rearing
42.03
37.68
40.97
37.90
Cost of rearing DOC into broiler
13.30
15.20
11.60
8.07
TOTAL cost of live chicken (per head)
63.27
62.94
65.96
58.37
Cost of chicken (per 1 kg slaughter weight)
23.61
31.00
32.98
30.40
Slaughter/processing/packaging (per 1 kg)
27.90
17.40
22.35
17.30
TOTAL cost of processed chicken
91.17
80.34
88.31
75.67
Yield, percent
78.7
75
80
73.3
Meat per head
2.11
1.52
1.60
1.41
43.20
52.77
55.19
53.77
Cost of 1 kilogram of meat
Source: Data from two leading Russian broiler producers, 2010.
41
The performance indicators of the Russian poultry industry leaders

are close to the national industry average because they have a
considerable share of big industrial broiler producers in overall
poultry production. The share of inefficient farms is low and does
not have much influence on the average (see Table 17).
Table 17: Key broiler production performance indicators in the
Russian poultry industry, 2010
Indicator
Company 1
Company 2
Russian Federation
average
7.4
7.8
7.2
Chicks hatch,
percent
75.9
81.5
80.2
Livability, percent
92.8
93.4
93.1
Average grow-out
period, days
37.5
39.5
41
74.4
80.7
73.3
1.85
1.86
1.87
53.3
54.2
47
Cycles (turnovers),
per year
Meat yield,
percent of live
weight
Feed conversion
adjusted
to 2000g of live
weight
Average daily
gain, g
Source: Confidential data from two companies and state programme Development
of poultry farming in the Russian Federation for 2010-2012 and till 2018-2020.
It is anticipated by Russian industry players that by 2020 a broiler

will gain more than 56grams per day, feed conversion will stabilize
at 1.82 kg and mortality will decrease to no more than 5 percent of
chicks entering production. The grow-out period will greatly depend
on the specific marketing strategies of individual companies.
Along with genetics, there is significant potential for improvement
in feeding and nutrition. Almost all Russian chicken farms lack
expertise, but those who understand the value of a properly
balanced feed diet have outsourced this service to the specialized
experts/consultants.
It is also expected that the Russian poultry industry will continue
to consolidate and experience a series of mergers and acquisitions
42
that will increase its vertical integration and improve its capacity to
acquire modern cost-saving production technologies through new
investment and management. Please refer to a separate section
in this report on industry concentration issues (Chapter 5) and
comparisons with other countries.
In 2005-2010 the growth of key pork performance indicators of
agricultural enterprises was considerable (see Table 18). Inefficient
producers went bankrupt or were acquired by more successful
competitors. A recent massive investment in new pork production
facilities has improved basic production indicators because of
improved genetics, feeding, vaccination and herd management
technologies.
Table 18: Key pork performance indicators of agricultural
enterprises, 2005-2010
Indicator
2005
2006
2007
2008
2009
2010
Average live weight

of pigs, kg per head
107
121
121
139
160
159
Average daily weight

gain of pigs, g
310
328
335
385
414
439
Considering the geographical vastness of the Russian Federation

and the various types of pig farms and their sizes, it is natural that
performance indicators vary depending on the type of farm (see
Table 19).
43
Table 19: Comparison of performance indicators of domestic

and foreign pig growing enterprises
Rusagro Europe,
North
(Belgorodsky
Bacon) America
Indicator
Units
Least
efficient
farms
Most
efficient
farms
Cherkizovo
Miratorg
Piglets per
sow per
year
heads
18
25
19
22.36
25.9
27
kg
1400
2100
2090
n/a
n/a
2190
Feed
conversion
kg/kg
gain
5.6
2.95
2.94
2.78
2.76
Total length
of growout period
days
200
168
177
n/a
n/a
160
percent
69
75
n/a
72
n/a
79
Meat
produced
per sow
per year
Yield
Source: National Union of Swine Breeders and data from companies in table
(average).
Even the most advanced domestic producers in the Russian

Federation do not reach the typical production indicators achieved
by European and American producers. This will probably change
with time as companies invest in staff education, professional
training, veterinary services, top genetics and quality of feed.
In recent years, cattle production also featured certain increases
in key performance indicators, such as daily live weight gain;
however, these increases were lower than those of raising pigs.
44
Table 20: Key performance indicators of cattle meat production

in agricultural enterprises, 2005-2010
Indicator
2005
2006
2007
2008
2009
2010
Meat production per

one head of cattle, kg
93
100
102
109
114
112
Average daily gain on

feed, g
414
437
445
478
503
501
Within agricultural enterprises, live weight of cattle at the time of

slaughter grew by 20.4 percent, and the average daily gain on feed
increased by 21 percent as well.
Indicators of weight gain may considerably vary from one region
to another. However, considering that there are no leading
beef producers, it was not possible to compare the leading and
less efficient farms in the cattle sector. The significant regional
differences in production efficiency indicators in raising cattle are
listed in Table 21.
Table 21: Average, daily gain of calves of beef breeds in
selected regions, grams
Under 8
months
Older than 8
months
Total
Orenburg Region
555
327
419
Chelyabinsk Region
705
519
575
Republic of Kalmykia
611
207
375
Region
Source: All-Russia Research Institute for Beef Cattle Breeding of the Russian Academy
of Agricultural Sciences.
It is expected that with increased government support to the

meat sector and the introduction of new genetics and production
technologies, productivity indicators will improve. However, it is
not certain to what extent the public support in this sector will
improve its competitiveness with imports.
45
Profitability of meat production: costs and margins

Information on private companies profitability is usually difficult
to obtain. However, some companies disclose their financial
statements and economic performance data in corporate annual
reports. Table 22 provides a summary of available information on
profitability of meat production by leading Russian companies in
2010.
Table 22: Meat sector profitability
Company
Broiler production
Swine production
Cattle production
EBITDA* margin in 2010, percent

-
45.16
Cherkizovo
Group
Miratorg
21.2
40.6
Rusagro
18**
42
Eurodon
15
25***
-17****
Average sector
Source: Companies data and the Report of the Minister of Agriculture to the
Presidium of the State Council on discussion and adoption of the Strategy of meat
livestock till 2020, given on 13.07.2010.

* EBITDA is an indication of earnings before interest expense, taxes,

depreciation and amortization. EBITDA margin is EBITDA divided by total
revenue.
** Turkey operation.
*** According to the Russian Pork Producers Union, the average pig production
profitability in 2011 was 17 percent with more effective producers receiving 25
percent returns.
**** Including state subsidies. The negative profitability would have been 23 percent
per year without state support.
Profitability of meat production varies considerably depending on

the region. According to the 2010 national report On the progress
and results of the implementation of the State programme of
agricultural development and regulation of markets for agricultural
products, raw materials and food for 2008-2012, the profitability of
poultry production exceeded 20 percent in the Republic of Komi,
Tatarstan, Amur, Kurgan, Kursk, Lipetsk, Moscow, Omsk, Penza,
Tver and Tomsk Regions.
Pork production was the most profitable (over 30 percent margin
per year) in Belgorod, Volgograd, Irkutsk, Kaliningrad, Leningrad,
Lipetsk, Orel, Omsk, Penza, Tambov, Tomsk and Chelyabinsk
46
Regions and the Republics of Mari El and Tuva. The only two
regions with profitable cattle production were Kalmykia and
Karachaevo-Cherkessia. Beef production in all the other regions of
the Russian Federation was unprofitable. Annex 5 provides more
information on meat production profitability in various regions of
the Russian Federation.
The compound feed prices directly affect meat production
profitability. Figures 25 to 30 compare average prices for meat
products with the prices of animal feeds in poultry, pork and beef
production.According to available data, the ratio of feed-to-poultrymeat price increased from 13 percent in 2005 to almost 18 percent
in 2010 with a peak (21.7 percent) registered during price increases
in 2008 (see Figure 25). These percentages indicate a decreasing
operating profitability of poultry meat production with time.
Figure 25: Comparison of average poultry meat prices (live
weight) with poultry feed prices, 2005-2010
60 000
50
54 230
40 000
40
43 350
35
45 075
40 813
39 822
30
30 000
25
21.7
20 000
10 000
45
12.9
14.2
5 276
5 639
2005
2006
17.1
17.7
20
percent
RUR/tonne (excl. VAT)
50 000
52 966
15
16.1
10
6 960
2007
9 770
9 257
9 362
2008
2009
2010
5
0
Poultry (left axis)

Combined feed for poultry (left axis)
Comparison of feed price to product price (right axis)
However, when comparing monthly averages of meat and feed

prices (with January 2005 fixed at 100 percent), it becomes
apparent that feed prices tend to be more volatile and outpace
increases in poultry meat prices. Feed prices registered a nearly
200 percent increase from January 2005 to January 2011 while
poultry meat prices increased by about 150 percent (see Figure 26).
47
Figure 26: Monthly indices of average prices for poultry (live

weight) and feed for poultry, 2005-2010
250
225
percent
200
175
150
125
100
75
Poultry meat
Sep 2010
Jan 2010
May 2010
Sep 2009
May 2009
Jan 2009
Sep 2008
Jan 2008
May 2008
Sep 2007
Jan 2007
May 2007
Sep 2006
May 2006
Jan 2006
Sep 2005
May 2005
Jan 2005
50
Combined feed for

poultry

Note: January 2005 =100 percent.
Similarly to decreased poultry producers margins, the ratio of

feed-to-pork price increased from 9 percent in 2005 to 14 percent
in 2010 with a peak registered in 2008 (see Figure 27).
Figure 27: Comparison of average pork prices (live weight)
with pig feed prices, 2005-2010
50
80 000
69 263
60 988
60 000
50 000
50 420
51 821
40
35
49 051
30
25
40 000
30 000
20 000
10 000
0
16.4
11.6
20
14.1
14.3
9.1
9.6
4 574
4 825
5 850
8 248
7 094
7 231
2005
2006
2007
2008
2009
2010
15
10
5
0
Pigs (left axis)

Comparison of feed price to product price (right axis)
Combined feed for pigs (left axis)
48
45
percent
70 000
69 748
Comparisons of the changes in monthly price indices (with January

2005 prices fixed at 100 percent) show trends very similar to
the decreasing poultry margins: feed prices registered a nearly
200percent increase from January 2005 to January 2011, while
pork prices increased by about 150 percent (see Figure 28).
Figure 28: Monthly indices of average prices for pork (live
weight) and feed for pigs, 2005-2010
250
225
200
175
150
125
100
75
Sep 2010
Jan 2010
May 2010
Sep 2009
Jan 2009
May 2009
Sep 2008
Jan 2008
May 2008
Sep 2007
Jan 2007
Pig meat
May 2007
Sep 2006
Jan 2006
May 2006
Sep 2005
Jan 2005
May 2005
50
Combined feed for pigs
49
Table 23: Cost of producing 1 tonne of pork in live weight,

thousand RUR (excl. VAT)
Index
Value
Percent of total
Production cost, including
61.6
90
Cost of piglets
31.7
46
Feed
22.5
33
Electricity, water
0.4
Gas
0.8
Veterinary/medicine
0.2
Fuel
0.6
Labour (salaries and taxes)
5.4
10
Total cost
68.6
100
Revenues from sales
76.3
Other costs (maintenance, overhead)
Margin, 1000RUR/tonne
7.7
10
Source: Data from a pig farm in the Northwestern Federal District, 2010.
The ratio of cattle feed to beef prices increased from 11 percent in

2005 to 19 percent in 2010 as indicated in Figure 29.
The cost of feed may be higher or lower depending on feed price,
producer location, access to transportation infrastructure and the
market. Considering other costs, a pig farmer in the Northwestern
Federal District of Russian Federation could expect the following
costs and returns per 1 tonne of pork. Pig producers may actually
operate on a fairly thin margin (see Table 23) and, therefore, be
very sensitive to changes in feed and other costs.
50
Figure 29: Comparison of average prices for beef (live weight)

and cattle feed, 2005-2010
60 000
54 371
40 000
41 762
39 235
55 951
40
35
45 641
34 003
30
30 000
25
20.8
10.8
3 606
3 669
4 963
2005
2006
2007
10
7 074
5 912
6 366
2008
2009
2010
Combined feed for cattle

(left axis)
Cattle
(left axis)
20
15
10.6
10 000
18.7
17.4
14.6
20 000
45
percent
50 000
50
5
0
Comparison of feed price

to product price (right axis)
Monthly indices of beef and feed prices (as compared with

January 2005) indicate that the increase in beef price outpaced
that of the feed price in January 2005-May 2007 and then again
in December 2008-September 2010. However, this did not result
in farmers rebuilding their cattle herd because of the overall low
profitability of raising cattle.
Figure 30: Average beef price indices in live weight and feed
for beef, 2005-2010
250
225
percent
200
175
150
125
100
Sep 2010
Jan 2010
May 2010
Sep 2009
Jan 2009
May 2009
Sep 2008
Jan 2008
May 2008
Sep 2007
Jan 2007
Beef
May 2007
Sep 2006
Jan 2006
May 2006
Sep 2005
Jan 2005
50
May 2005
75
Conbined feed for cattle
51
Table 24 illustrates some production costs in beef cattle. It is

difficult to assess overall profitability of beef cattle as there is not
much evidence yet in the country. The table below does not reflect
the significant costs in acquiring the start-up Hereford cattle and
the long payback period on such an investment.
Table 24: Illustrative cost of producing one tonne of Hereford
cattle in live weight, thousand RUR (excl. VAT)
Item
1
Index
Value
Production cost, including
56
1.1
Labour (salaries and taxes)
17.4
1.3
Compound feed
30.1
1.4
Hay
4.6
1.5
1.6
Haylage
Corn silage
Other costs (maintenance, fuel, etc.)
1.9
1.2
13.5
Total cost (excluding beef calves)
69.5
Revenues from sales
90.9
Source: Farm data from Ural Federal District, 2010.
Common production technologies

Russian meat producers have been able to improve their production
efficiency and quality of products and reduce production costs in
recent years. However, most of them still need substantial capital
investment and skilled professional labour and management. Meat
production in the Russian Federation is still largely based on the
Soviet-style concept of production formerly known as kolkhoz (or a
collective farm) and sovkhoz (or a state farm).
In many cases, especially in poultry and pork production,
production facilities are concentrated in one company, with
very little specialization between farms, which outsources feed
production and services.
Dairy farms are the main producers of beef. A number of farms
have small feedlots that are used both for dairy cattle feeding and
combined meat-and-milk calf breeding.
A detailed description of most typical production technologies and
their main considerations, such as housing or grazing technology,
52
feeding, manure utilization, slaughter, processing, chilling and

other production technology aspects is available in Annex 3.
Feed availability and production

Because feed costs may reach 40-50 percent of the total
livestock and poultry production costs, availability of a reliable
and reasonably priced feed supply is an important business
consideration. Barley, feed wheat, sunflower seed meal, maize
and soybean meal are the main sources of plant proteins used
in compound feed production for poultry and pigs. The role
of fishmeal and bone meal is less important in Russian feed
production.
Feed supply has largely depended on the weather and grain and
oilseed production conditions in the main agricultural regions.
According to feed consumption, estimated in Figure 31, there has
been a clear upward trend in feed protein consumption.
Figure 31: Estimated consumption of feed protein from main
cereals and oilseed meals, 2001-2012
5 000
thousand tonnes
4 000
3 500
3 000
2 500
2 000
288
405
4 500
86
293
272
108 194
350 322
290 306
270
391
442
252
423
524
279
452
315
429
663
718
1 150
1 084 1 177 1 507 1 287 1 199 1 298
351
464 252
439
862
757
481
1003
1 353 1 337
510
1 088
605 1078
1 500
1000
500
1 560 1 800
1 840 1 944 2016 1 920 1 860

1 788
1 692
1 500 1 632
Barley
Maize
1/
12
20
1
0/
11
20
1
9/
10
20
0
08
/0
Meal, sunflower seed
20
07
07
/0
20
06
20
06
/
05
Wheat
20
05
/
/0
4
20
04
/
20
03
20
02
/0
3
Meal, soybean
Source: Authors calculations based on USDA PSD online (www.fas.usda.gov/

psdonline/psdQuery.aspx).
Note: The following protein content was assumed for conversion purposes: 11 percent
for barley; 9 percent for maize; 12 percent for wheat 46 percent for soybean meal and
33 percent for sunflower seed meal.
53
There is also a clear upward trend in compound feeds

production for livestock and poultry feeding. According to the
First Independent Rating Agency (FIRA), the volume of Russian
compound feed production in 2010 totaled 16million tonnes, which
is 64 percent more than in 2005. Starting in 2005, compound
feed production has been increasing by about 10 percent p.a. on
average (see Figure 32).
Figure 32: Production of compound feed in the Russian
Federation, 2005-2010
18 000
16 155
16 000
14 712
31 750
thousand tonnes
14 000
12 464
11 390
12 000
10 011
10 000
8 000
6 000
4 000
2 000
0
2005
2006
2007
2008
2009
2010
Source: Information-analytical system FIRA PRO.
The Russian Federations Ministry of Agriculture believes that

the actual feed production could have been higher if the feeds
produced within the integrated meat production companies (e.g.
compound feeds that are produced and consumed within one
company) were taken into consideration. They accounted for
40 percent of total registered production. Therefore, total feed
production in the Russian Federation was believed to actually total
approximately 28million tonnes in 2010.
The increase in the compound feed production was first of all
driven by higher demand from the poultry and pork production
sectors. Compound feed for poultry constituted the major
share (57.7 percent) of total compound feed production in 2010.
The feeds for pigs and cattle accounted for 25.8 percent and
13.3percent respectively (see Figure 33).
54
Figure 33: Structure of compound feed production, 2010
26%
Feed produced for poultry
Feed produced for pigs
58%
Feed produced for cattle

Feed produced for other animals
13%
3%
Source: FIRA PRO.
As shown in Figure 31, local compound feed is characterized by a

large content of cereals. While the compound feed in Europe usually
contains no more than 45 percent of grains, the grain content in
the Russian Federation reaches 70 percent. This is mostly owing
to a relatively low share of protein meals (soybean and sunflower
seed meal) available in the Russian Federation. Though there was a
slight increase in domestic soybean meal and cake output, current
soybean meal production levels do not meet the increasing demand
from feed manufacturers, leaving space for meal imports. Soybean
meal is usually imported from Brazil or transported from the
soybean processing facility Sodruzhestvo located in Kaliningrad.
The following major feed-related issues are faced by Russian
livestock producers:
p
urchased feeds usually cost 15-30 percent more than the
feeds produced by the mills integrated into poultry production
complexes;
outsourced feeds have poor traceability;
o
utsourced feed supplies are inconsistent and delivery
schedules are not respected;
i ndependent feed mills do not provide consistent and reliable
quality feed;
they often use cheap and low quality soybean and fish meal;
feed can often have mycotoxins.
Among the issues related to the production of cattle (both beef
and dairy), certain issues exist with the forage (hay, silage, etc.)
55
production, including cattle grazing on low-productive natural

pastures; cutting grass beyond the optimum stage negatively
affecting nutritional value of hay and its digestibility); and inefficient
conservation and storage (especially in the case of late silage and
haylage preparation and storage losses).
Box 3: Feed quality issues
Feed quality is one of the main concerns for livestock and poultry producers as it
directly affects animal and poultry productivity and health. Many independent feed
producers, being concerned by feed costs and their margins, often fail to supply quality
feeds to their buyers. Many compound feed producers do not have adequate technical
capacities to assure a uniform quality mix of feed ingredients, premixes and additives.
As a result, lack of trust to external feed suppliers prevails amongst livestock and
poultry producers. Many of them decide to invest in their own feed production
facilities to assure reliable supplies. Many agroholdings have thus become leading feed
producers in their respective regions.
The GOR has recently updated the old Soviet compound feed standards to facilitate
industry development. In July 2011, the Soviet-time state standard GOST 12220-96
("Toasted soybean meal for feeds"), which envisaged that only 45 percent crude protein
soybean could be used in compound feed production, was replaced with a new GOST
R 53799-2010. The new standard allows compound feed producers to utilize six different
protein levels (from 42 percent to 54 percent crude protein) in production of compound
feeds.
The list of specific compound feed standards effective in the Russian Federation is
provided in Annex 4.
Animal health issues

In the Russian Federation, animal health falls under the
responsibility of the Rosselkhoznadzor (Federal Service for
Veterinary and Phytosanitary Surveillance), and Rospotrebnadzor
(Federal Service on Customers Rights and Human Well-being)
focuses on overall food safety issues for all food products.
Animal and poultry diseases represent a major threat to potential
investors in the livestock and poultry production due to their
devastating potential. Therefore, we decided to cover some of
these issues as they affect sector development.
Recent outbreaks
In the last decade, the Russian Federations livestock production
has been challenged by a series of animal disease outbreaks that
have had a high level of production and financial impact, such as:
56
cattle: foot-and-mouth disease (FMD);

poultry: AI;
pork: African swine fever (ASF).
Foot-and-mouth disease (FMD). FMD has been historically
endemic in many regions of the Russian Federation, though in the
last 20-30 years outbreaks were very sporadic and were controlled
by quick responses from veterinary authorities. In 2010-2012, there
were at least 15 outbreaks of FMD in Trans-Siberia, Primorsky Krai
and Irkustk Oblast that affected thousands of cattle, pigs, goats
and sheep. According to genetic analysis, these recent cases of
FMD were related to the FMD outbreaks in China, Mongolia and
Eastern Kazakhstan in 2010-2011. Elimination of border controls
between Kazakhstan and the Russian Federation both in the
Customs Union makes cross border veterinary inspection and
control more difficult.
Avian influenza. This disease was registered in the Russian
Federation in 1978. It occurred again in 2005-2006 and affected a
few Russian regions as shown in Figures 34 and 35.
Figure 34: AI outbreaks in the Russian Federation, 2005
62 affected sites in 10 regions of Russia

Died - 26844, destroyed 609250 birds
One affected commercial layers farm in
Kurgan region
In Kalmykskaya Republic and Astrakhan region

(colored in yellow) restriction measures were
implemented in villages located close to migratory
stations of waterfowl to prevent the spread of the
virus to poultry
Source: All-Russia Scientific Research Institute of Animal Protection.
57
Figure 35: AI outbreaks in the Russian Federation, 2006

Total:
93 affected sites in
16 territories
of Russia
Total losses in
poultry have not
exceeded 1.400.000
birds
As of 1 August
1 site in Tomskaya
oblast was still
under quarantine
No new cases
since 5 July
Source: All-Russia Scientific Research Institute of Animal Protection.
The Russian veterinary services, the federal government and

local authorities took unprecedented measures to prevent further
expansion of AI outbreaks, including:
strict quarantine regime introduced in affected areas;
backyard flocks were preventively culled;
the state compensated financial losses to the population;
s everal vaccines were developed and applied to selected flocks
(over 150million doses);
a national monitoring programme for pathological material of
wild birds was implemented.
There have been no outbreaks in commercial or backyard flocks
in the Russian Federation since early 2007, and several positive
cases of low-pathogenic AI antibodies were revealed as a result of
monitoring migrating birds.
African swine fever. ASF started spreading throughout the
Russian Federation in August 2008, from Krasnodar Region and
North Ossetia; supposedly it came from Georgia. According to
estimates of Rosselhoznadzor, ASF was registered in 24 regions
of the Russian Federation. It affected 254 settlements and
37production facilities.
58
About 440000 pigs were slaughtered in order to control the

outbreak. According to various estimates, pork farms lost about
10percent of production because of this pandemic.
Figure 36: Map of AFS outbreaks in the Russian Federation
ASF OUTBREAKS
(2 MARCH 2012)
Source: All-Russia Scientific Research Institute of Animal Protection (VNIIZZH).
The North Caucasus Federal District and South Federal District are
considered to be an endemic (unfavourable) zone for ASF, and the
disease can easily spread from a single infected animal outside the
endemic zone.
In early 2012, the veterinary authorities reinforced controls (see
Figure 36.). As of 1 March 2012, rural households in the Krasnodar
Region were prohibited to raise more than three pigs for finishing.
Implementation of the new rules is likely to be difficult; however,
the local authorities continue to promise to assist pork farmers in
developing alternative livestock production activities.
ASF is considered the main threat to the Russian Federations
livestock sector as farmers and local authorities often do
not declare outbreaks to veterinary authorities immediately,
biosecurity on rural household farms and some industrial farms is
not observed and animals enter into contact with wildlife and the
geographical vastness complicates animal quarantine provisions.
59
Chapter 4 - Meat processing

Recent trends in meat processing
There have been notable shifts in the structure of the Russian
meat market, including shrinking beef consumption in favor of
poultry meat; progressive exit of rural households from the market;
and an increased supply of fresh and chilled meat replacing frozen
products.
Formally registered meat and processed meat products in
the Russian Federation doubled from 2005 to 2010, reaching
3.9million tonnes of fresh meat and by-products (see Table 25).
Though there was outstanding growth in the pork and poultry
sector of 137 percent and 139 percent respectively in 2005-2010,
beef production registered a 23 percent decrease.
Table 25: Industrial production of main meat products in the
Russian Federation, 2005-2010, thousand tonnes
Change
2010 2010 vs.
2005
Product type
2005
2006
2007
2008
2009
Fresh meat and

by-products:
1857
2185
2561
2899
3441
3888
109%
-Beef
327
303
284
278
252
251
-23%
-Pork
337
405
502
502
666
800
137%
1141
1424
1721
2067
2426
2729
139%
-Other types of
meat
13
13
12
11
13
16
23%
-By-products
39
39
42
41
84
92
136%
Sausages and
cooked meats
2014
2198
2411
2454
2246
2388
19%
Further
processed
meat products
987
1093
1254
1451
1503
1614
64%
Standard cans,
million*
549
523
521
580
690
651
19%
-Poultry
meat and byproducts

* Net weight of one standard can is 350g.
60
Production of precooked meat products increased by 64 percent

during the period of 2005-2010 (see Table 25) to reflect an
urbanizing population, higher incomes in the cities, new lifestyles
and expansion of retail, hotel, restaurant and catering services
(HORECA) that demand more value-added products in convenient
packaging.
The appetite of Russian consumers for sausages has always been
high and continues to grow (19 percent from 2010 to 2005). It is
worth noting that sausages take the fourth place in consumers
food basket after dairy, vegetables and fruits and bakery products.
The most popular sausage products according to the biggest
Russian meat processing company, Cherkizovo, include:
bologna sausages (Doktorskaya) 38 percent;
franks sausages (sosiski) 27 percent;
smoked sausages 18 percent;
other categories 12 percent.
After overcoming the economic recession of 2008-2009, Russian
consumers started buying more sausages and meat products,
thus stimulating production. As Russian consumers switched
to more expensive sausage products, the share of smoked
sausage production increased, and the share of bolognas and
franks declined. As a result, the whole sausage segment grew by
18percent reaching 2.4million tonnes in 2010. However, locally
produced products in this segment have started losing ground
to foreign competitors as the quality of Russian sausages has
decreased. With weak technical regulations and enforcement
(as compared with the European regulations that measure
animal protein) and aggravated by the financial crisis, many meat
processors started adding less meat to the recipes in order to cut
down on raw material costs.
The meat-canning segment is traditionally important in the Russian
Federation as the government maintains intervention stocks
of beef and pork. Today the canned meat sector faces certain
challenges as fresh, chilled (and frozen) meat become available
as well as value-added meat products. We still note some growth
in this segment featuring 18.6 percent increase from 549million
standard cans in 2005 to 651million in 2010. However, in the precrisis years (2006- 2010) there was a slight decline in canned meat
production.
61
Since the early 2000s, halal meat has been rapidly gaining
importance in the Russian Federation. Today, there are over
2.3million Muslims in the country. The International Centre under
the Russia Muftis Council certifies about half of halal meat. Halal
production is concentrated not only in Moscow but also in the
south of the Russian Federation, in the North Caucasus and
Volga Regions. This new category in the meat sector has grown
considerably in recent years; by the end of 2010 there were 57
halal-certified meat-processing facilities across the country, and
the share of halal products in the poultry subsector is about
6.5 percent.
Food safety issues

Meat consumption will be increasingly affected by consumer
awareness of food safety and quality issues as competition
increases in the domestic market. It is expected that this
increasing awareness will lead towards increased food safety
standards of the major retail chains and food service companies
in the Russian Federation. An increase in standards will inevitably
require livestock and poultry producers and meat processors to
invest in both introduction of the traceability systems and modern
food safety control programmes.
Box 4 illustrates some food safety issues by using the case of
salmonella prevalence in the poultry meat sold in retail in the
Russian Federation.
62
Box 4: Meat safety and quality: the need for continuous improvement
The Russian Federation introduced new standards (GOSTs or GOSTs-R) for chicken
meat, turkey, pork and beef in 2007-2011 to update the standards that were developed
in the 1970s-1980s to regulate both the quality and the food safety aspects of meat and
meat products in the Soviet Union. The list of the new meat standards is provided in
Annex 4: Applicable State Standards in the Russian Federation.
The major Russian meat producers started introducing modern quality and safety
standards in the early 2000s. Some companies implemented the ISO 9001/02 systems,
Good Manufacturing Practices, ISO 22000, ISO 14000 and the hazard analysis at critical
control points (HACCP). In the Russian Federation, HACCP received the status of a
National Standard in 2003, though the Russian version appears to be much shorter than
the standards approved in the USA and the EU.
As of early 2012, about 30 percent of the Russian slaughterhouses and the prime and
secondary meat processing facilities had HACCP systems in place that conformed
with the Russian regulations, though only a handful of them were certified by an
international HACCP certification body. This is mostly due to lack of understanding
of the HACCP system, professional consultants, and financial resources required for
HACCP implementation and consistent effort from management.
Currently, specific food safety indicators are regulated by the Sanitary Norms and Rules
(SANPIN), developed and approved by the Ministry of Health of the Russian Federation.
Adherence to SANPIN is controlled by the Federal Service for Surveillance in the Area of
Consumer Rights Protection (RosPotrebNadzor) and Federal Service of Agricultural and
Phytosanitary Surveillance (RisSelkhozNadzor). Russian sanitary regulations, especially
requirements for antibiotics and feed additives, are often criticized by the countrys
trading partners as not being based on scientific evidence and risk assessment.
Certain compliance issues exist domestically as not all meat producers meet national
food safety regulations and norms. This is especially true for the bacteriologic and
maximum residue levels. In 2011, research* on salmonella prevalence on chicken meat
in the Russian Federation conducted in three regions: Moscow Oblast, Leningrad
Oblast and Krasnodar Krai (with a total of 698 samples) indicated that salmonella
prevalence was 31.5 percent on whole birds. This indicator typically ranges around
4-16percent in the USA and the EU. The same research suggested that strategies, such
as good agriculture and management practices, should be enhanced to improve food
safety of chicken meat in the Russian Federation.
* Alali WQ, Gaydashov R, Petrova E, et al. Prevalence of Salmonella on retail chicken
meat in Russian Federation. J Food Prot. 2012 Aug;75(8):1469-73.
63
Marketing channels
According to the Federal State Statistics Service (FSSS),
most domestically produced meat is marketed to processing
companies (63.3 percent) and wholesale traders (21.8 percent).
About 6.8percent of meat production is purchased by the State,
4.1percent is sold through retail and another 3.3 percent is
channeled through HORECA. Barter and supplies that pass via
consumer cooperatives are negligible (see Table 26).
Table 26: Marketing channels of food products, 2010
Marketing channel
Thousand tonnes
Percent
Processors
3613.7
63.3
Wholesalers
1247.0
21.8
Organizations making purchases for

state needs
390.1
6.8
Retail stores, branded stores, street

kiosks
232.9
4.1
HORECA
190.1
3.3
33.3
0.6
4.9
0.1
5712.1
100.0
Barter (exchange operations)

Consumer cooperatives
Total
Meat holds an anchor position in the retail food market. In 2010,

about 68 percent of meat and meat products were sold through
retail stores. In 2010, retail turnover of meat and meat products in
the Russian Federation reached RUR1264 billion (about USD39
billion), and this trend is expected to grow by 30-35 percent in the
upcoming years thanks to new openings (see Table 27).
64
Table 27: Retail sales by sector, 2006-2010, million USD

Channel format
Change Change
2010/09 2010/06
2006
2007
2008
2009
2010
Store retail
195285
250341
308116
248457
292575
17.8%
49.8%
Grocery retailers
106825
139808
176415
155811
188760
21.1%
76.7%
Food/drink/tobacco
specialized stores
3555.9
4422.4
5052.7
4355.8
5162.9
18.5%
45.2%
Hypermarkets
6509.9
10559.9
15709
14315.4
18066
26.2%
177.5%
Small grocery retailers:
37562.8
47955.6
59211.2
52987
62969.5
18.8%
67.6%
- Convenience stores
3051.1
4694.1
6260.5
6136.3
7331
19.5%
140.3%
- Forecourt retailers
319.3
374.9
420.8
331.4
400.3
20.8%
25.4%
- Small independent
grocers
34192.4
42886.6
52529.9
46519.4
55238.1
18.7%
61.6%
Supermarkets
38275.8
50954.8
64886.3
57269.6
71703
25.2%
87.3%
Other grocery retailers
20920.4
25915.2
31555.7
26882.6
30858.9
14.8%
47.5%
Large retail chains (like X5-Retail Group, Magnit, Seventh

Continent, Dixie, Auchan and German Metro AG) have been
shaping the meat market by setting rules for suppliers. Local
producers are not always ready to address the requirements
regarding quality standards, in particular traceability, packaging
and high marketing budgets. Retail chain expansion has also
entailed the fast development of a distribution infrastructure. If not
economically efficient, small and medium retail stores leave the
market. Markups in Auchan go from 0 to 17 percent, while street
kiosks and small shops take up to 30-35 percent.
Besides the traditional retail stores (supermarkets, hypermarkets,
grocery stores and convenience stores), frozen meat is also
marketed through open markets (small wholesale), fresh meat
through farmers markets and processed meat products (sausages,
franks, hams, delicacies) through branded company stores.
Marketing channels differ significantly across the country: in the
big cities the retail share is higher and the share of markets,
non-chain stores, small stores and kiosks is lower than in smaller
65
towns and rural settlements. On average, modern retail trade

sells 30 percent of all meat and meat products. In Moscow, this
indicator is about 50 percent, and in Saint Petersburg it is about
80percent.
Meat processing efficiency: costs and returns in the

meat processing sector
As a rule, major meat processing factories not only provide full
processing of raw materials (from slaughter to packaged meat
products) but also have a clear tendency for increased production
capacities. This is largely due to the tightening environmental
regulations that require meat processing facilities to build efficient
sewage treatment plants. According to VNIIMP (All-Russia
Meat Processing Research Institute), the share of a wastewater
treatment facility in total meat processing factory investment costs
may be as follows:
7 percent for a new 100 tonne/shift meat processing facility;
10 percent for a 30 tonne/shift establishment;
3
0 percent for a small slaughterhouse with a daily production
capacity of 2 tonnes/shift.
High-capacity meat processing facilities (over 100 tonnes/shift)
provide higher meat yields and may increase processors margins
by adding value to slaughter by-products, such as the production
of meat and bone meal from animal carcasses after the meat is
removed. Experts estimate the average payback period of the
meat processing industry to be 4-7 years. The typical costs of a
meat processing plant are provided in Table 28.
66
Table 28: Cost breakdown of producing one tonne of boneless

meat products
Item
1
Index
RUR thousand
(excl. VAT)
Percent
Production costs, including
166.6
85
1.1
Raw meat
143.2
73
1.2
Other ingredients
15.4
1.3
Core production staff wages
6.2
1.4
Other
1.9
2
3 (1+2)
4
5 (4-3)
Overheads, maintenances, etc.
30.5
15
Total cost
197.1
100
Revenues from sales
212.2
Margin per tonne
15.1
Source: Data from a meat processing plant in Northwestern Federal District (capacity
of ten thousand tonnes of meat per year) as of 2011.
The profitability of meat production is also largely determined

by the size of specific consumer groups and their products
preferences. For example, the production of hard smoked
sausages and delicacy meats can be much more profitable than
the production of cooked sausages, frankfurters and wieners.
However, the share of the former in total sales usually does not
exceed 3-5 percent, depending on the region or city.
67
Chapter 5 - Meat market concentration

The top five meat producers
Among the meat subsectors, poultry plays a leading role in terms
of concentrated production. The top five companies control
36.6percent of the Russian industrial poultry output (see Table 29
and Figure 37).
Table 29: Top five producers of poultry meat in the Russian
Federation, 2010
Ranking
Company
Poultry
production,
slaughter
weight,
thousand
tonnes
JSC
Prioscoliye
355.2
14.1
10.1
Cherkizovo
Group
194.1
7.7
5.5
Agroholding
BEZRKBelgrankorm
148.8
5.9
4.2
Prodo Group
146.4
5.8
4.2
JSC Belaya
Ptitza
78.0
3.1
2.2
922.5
36.6
26.2
Total
Source: Russian Poultry Union.
68
Poultry
production
share,
percent
Meat
market
share,
percent
Figure 37: Share of the top five producers in total commercial

poultry meat production, 2010
63%
Top five producers

Other producers
37%
Source: Russian Poultry Union and companies data.
The biggest Russian turkey producers are Evrodon, Krasnobor,

Sibirskaya Guberniya, M. Gaufuri and Egoriyevskaya Farms.
The detailed profiles of the leading producers of poultry meat can
be found in Annex 7.
Raising pigs has a lower level of production concentration than
poultry. In 2010, the top five producers generated an estimated
29percent of the total pork output (see Table 30 and Figure 38).
Table 30: Top five producers of pork, 2010
Company
Pork production,
slaughter
weight,
thousand tonnes
Pork
production
share,
percent
Meat
market
share,
percent
APH Miratorg
137.6
8.4
4.6
GK AgroBelogorie
100
6.1
3.4
Cherkizovo
Group
87.6
5.4
2.9
PRODO
Group
77.43
4.8
2.6
GK RUSAGRO
61.9
3.8
2.1
464.53
28.5
15.6
Ranking
Total
Source: National Union of Pig Growers and companies data.
69
Figure 38: Share of the top five producers in total commercial

pork production, 2010
71%
Top five producers

Other producers
29%
Source: National Union of Pig Growers and companies data.
Detailed profiles of the leading pork producers are given in

Annex7.
In contrast with poultry and pork, beef production has very low
concentrations of production in the Russian Federation. The
five leading producers supply only 3.3 percent of the total beef
production volume (see Table 31 and Figure 39). This can be
explained by the fact that beef production requires large areas
of agricultural land for feed production that constrain the size of
livestock farms.
Table 31: Top five producers of beef, 2010
Company
Cattle production,
slaughter weight,
thousand tonnes
Cattle
production
share, percent
Meat market
share, percent
AKGUP
(Promyshlenny)
0.9
0.2
JSC
(Agrocomplex)
4-5
0.8
0.2
OAO KRASNY
VOSTOK AGRO
0.7
0.2
OAO (Agrofirma
Mtsenskaya)
0.5
0.1
OAO
Belorechenskoe
2-2.5
0.4
0.1
18-19.5
3.3
0.8
Ranking
Total
Source: Companies data.
70
Figure 39: Share of the top five beef producers in commercial

beef production, 2010
97%
Top five producers
Other producers
3%
Sources: Companies data and authors calculations.
The largest beef livestock farms (with over 3million head) are
Limited Liability Company (LLC) Warsaw in Chelyabinsk Region;
Open Joint-Stock Company (OJSC), PKZ Zimovnikovsky in Rostov
Region; SPK Ergeninsky in the Republic of Kalmykia; JSC, Plant
Breeding named after Arashi Chapchaev in the Republic of
Kalmykia; LLC, Center of Genetics, Angus, in Kaluga Region; SPK
Fedoseevskiy in Rostov Region; and JSC PP, Progress in Rostov
Region.
Sales of beef from meat cattle are currently very low. The biggest
producer generating revenues in this segment is All Beef in the
Lipetsk Region.
Leading meat brands

Branding is traditionally more developed in the processed meat
product segment of the market: sausage products, delicacies
and ready-to-cook and ready-to-eat processed products like meat
dumplings, meat ravioli, meatballs, nuggets and patties. Chilled
and frozen meats are also sold under trademarks; some are sold
under the private labels of supermarkets. In the wholesale trade,
especially when products are sold on a live weight basis or as half
carcasses, the name of the slaughter enterprise is often referred
to as a brand.
71
The leading brands of poultry meat (sales, in value) are:

b
rands of GC Prioskolye: Prioskolye, Picnics Prioskolya, Al Safa
and Coco Pulet11;
b
rands of the Cherkizovo Group: Petelinka, Kurinoe tsarstvo,
Mosselprom, Vasilevka and Domashnyaya kurochka;
brands of BEZRK-Belgrankorm: Yasnye zori and Kurinyj korol12;
brands of the Prodo Group: Troekurovo and RoKoKo.
Leading brands of pork (sales, in value) are:
Miratorg13;
A
gro-Belogorie Group of Companies: Dalnie Dali and AgroBelogorie;
Cherkizovo Group.
Leading brands of beef (sales, in value) are:
Klin Meat Plant (owned by the Prodo Group);
M
eat and poultry plant Penzensky (belongs to Cherkizovo
Group);
Ulyanovsk meat farm (owned by Cherkizovo Group).
A list of the leading meat brands is available in Annex 6.
The top five meat processors

The Russian meat processing sector is characterized by rather low
consolidation due to vast distances, consumers preferences for
local and regional producers and trademarks, lack of processors
capacity to market and manage federal brands and different
conditions of production assets.
The leading meat processors are concentrated in the main pork
and poultry producing regions, such as Belgorod Oblast, Moscow
Oblast, Leningrad Oblast, Krasnodar Krai, Voronezh Oblast,
Tatarstan and Lipetsk Oblast (see Figure 40).
11 This manufacturers meat processing sector also has brands like Fly de Lunch (food
made of poultry meat: burgers, kebab, fillets, etc.), Slavnaya marka (sausages and
cooked products), and chicken specialties.
12 Brand Rural Traditions was designed for the sausage segment.
13 Included in the meat processing sector of this manufacturer is the brand Gur
Mama (nagetsy chicken, burgers, steaks, fillets and chicken pieces).
72
Figure 40: Number of meat processing plants*, 2009

70
60
percent
50
40
30
20
10
0
Vo
lg
Ce
nt
er
So
ut
Ca
uc
or
as
us
th
ra
ls
or
th
Fa
rE
es
as

*Minimum plant capacity is 20 tonnes of finished product/day.
The following main trends of slaughterhouses and meat

processing facilities have been observed:
c attle and swine slaughterhouses and the main processing
facilities are close to meat production areas;
p
oultry slaughter and processing are concentrated around
poultry farms throughout the Russian Federation;
f urther meat and poultry processing and value-addition are
concentrated around big cities.
The main meat processing facilities are located in Moscow
(17.2percent) and in the Moscow Oblast Region (8.5 percent).
Regional concentration of meat processing facilities is low; 43
percent of all processing facilities in 2009 were concentrated in
the regions that have less than 2 percent of the total distribution
(see Table 32).
73
Table 32: Leading meat processing regions, 2009, percent

Russian Federation
100
Moscow
17.2
Moscow Oblast Region
8.5
Krasnodar Territory
4.1
Vladimir Region
3.8
Saratov Region
3.8
Pskov Region
2.8
Republic of Bashkortostan
2.7
Leningrad Region
2.5
Tyumen Region
2.4
Chelyabinsk Region
2.4
Novosibirsk Region
2.4
Sverdlovsk Region
2.2
Rostov Region
2.1
Others (regions that have less than 2%)
43.1
The Ostankisnky meat processing factory and Cherkozivo Group

were the two largest meat processors in 2010. Only two more
companies produced above 100000 tonnes of meat products each
in 2010 (see Table 33).
74
Table 33: Top five meat processors, 2010

Processed
Processed meat
meat
production,
production
thousand
tonnes share, percent
Meat
market
share,
percent
Producer
Ostankinsky
myasokombinat
151.0
3.6
3.5
Cherkizovo Group
142.0*
3.4
3.3
ABI PRODUCT
117.4
2.8
2.8
PRODO Group
105.7
2.5
2.5
JSC Mikoyanovsky
myasokombinat
79.1
1.9
1.9
Source: Meat Union of Russia and companies data.

*The company claimed its processing capacity increased to 190000 tonnes before 2012.
The market of processed meat products is not concentrated as

the five major players have 14 percent of the total market share by
volume (see Figure 41).
Figure 41: Share of the top five producers in the total
industrial production of processed meat products
14%
Top five
Others
86%
Source: Meat Union of the Russian Federation and companies data.
The leading brands of processed products

In contrast with the milk processing industry, in which international
companies like Danone, Unimilk and Wimm-Bill-Dann (the latter
purchased by PepsiCo) dominate the market, there are no main
75
foreign meat market players in the Russian Federation, with an

exception of the Atria Group, which owns KampoMos and PitProduct brands. The information on the top brands in the Russian
meat market and their estimated value is provided in Table 34.
More information on specific meat brands and their short profiles
can be found in Annex 6.
Table 34: Top three brands in the meat processing industry
N
Sales volume
(billion RUR)
Brand cost
(million USD)
Share of consumer
preference, percent
OstaNkino (22.5),
Ostankinsky
myasokombinat
Mikoyan (86),
Mikoyanovsky
myasokombinat*
Mikoyan (24.1),
Mikoyanovsky
myasokombinat
Cherkizovsky (12.9),
Cherkizovo Group**
Cherkizovsky (77),
Cherkizovo Group
Dymov (14.1),
Dymov sausage
production***
Tsaritsyno (10.5),
GK Tsaritsyno
OstaNkino (49),
OAO Ostankinsky
myasokombinat
OstaNkino (12.6),
Ostankinsky
myasokombinat
Source: Forbes, 2010, Rubrand 2011 and Favorite brands of Russians 2011.
* This producer has one more brand: Okhotniy ryad that produces fine-food where
food is handmade using long-standing technologies.
** Fine food has the labels Pyat zvezd and Imperiya vkusa. Economy-class sausage
production has the label Myasnaya guberniya.
*** Fine food labels are Vysokaya kukhnya, Piccolini and Dymov N1, and the
economy class label is Shchedrino.
Sector consolidation trends

This sections covers the most significant mergers and acquisitions
in the meat sector of the Russian Federation in 2010-2011. Please
refer to a separate section in this report on recent investment
trends in the meat industry by each subsector.
76
Meat production
In 2011, the Cherkizovo Group bought 100 percent of the assets
of the Mosselprom agricultural holding. The Mosselprom business
was valued at USD252.9million. Due to this deal, Cherkizovo
hopes to increase its market share of domestic producers of
poultry meat. The Cherkizovo Group also acquired the LLC poultry
farm Zarechnaya, located in the Penza Region. The total value of
the transaction amounted to USD5.2million.
The Agroholding Komos-Group (Udmurtia) purchased 100 percent
of the shares of Mendeleyev Poultry Farm from the administration
of Perm Region for RUR76million. JSC Mendeleev Poultry Farm
produces and markets hatching eggs, DOCs and commercial eggs.
In 2009, the poultry farm produced 130million eggs.
In May 2010, the largest agro-industrial holding in the Tomsk
Region, JSC Siberian Agricultural Group, bought the Tomsk
Poultry Farm belonging to JSC Sibirskaya guberniya (included
in the Krasnoyarsk agricultural holding ALPI) for RUR1.5 billion.
Production of broiler meat will increase 1.5 times, up to 30000
tonnes per year.
In June 2011, JSC Agrocomplex bought the Tbiliskaya Poultry Farm
for RUR60.5million. JSC Poultry Breeding Tbilisi is located in the
village Lovlinskaya in the Tbilisi District (Krasnodar Territory). The
company produces and sells eggs and produces meat and crops.
It is also involved in egg incubation and the breeding and sale of
day-old chicks.
In 2011, the JSC GAP Resource acquired JSC Stavropol Broiler for
USD120million (estimated) from Interros Group. The production
capacity of the complex is estimated at 45000 tonnes of broiler
meat per year.
Further growth in the poultry industry will be determined by local
demand and the level of consolidation in the market. According
to Rabobank, the potential for further consolidation in the Russian
poultry industry is significant as compared with the industrys
potential for growth (see Figure 42). It is assumed that in countries
where domestic market growth potential is low and industry
concentration is high companies will start looking for export
opportunities.
77
Figure 42: Poultry industry production growth and

consolidation rates in selected countries, 2010-2020
China
Thailand
Russian
Federation
Brazil
US
EU
60
50
40
30
20
10
10
20
30
40
50
60
percent
Consolidation rate
Production growth
Source: Crossroads for Growth: the International Poultry Sector Towards 2020,
Rabobank, 201114.
In the fourth quarter of 2010, the Cherkizovo Group bought from

the NAPCO Group 100 percent of the Penza Grain Company and
the Lipetskmyaso company shares (pig-breeding farms located in
Lipetsk and Penza Districts) for USD100million.
JSC Siberian Agricultural Group acquired from LLC Group Sinara a
75 percent stake in JSC Meat concern Kamensk-Ural (Micom). The
same group acquired 100 percent of the pig complex Polevskoye
shares for the purpose of building a vertically integrated agricultural
holding company, LLC Pig Complex Ural in the Urals.
In January 2012, LLC Russian Dairy Company (RUSMOLKO)
and the company Olam International signed an agreement on
a strategic partnership. The main result of their joint efforts will
be investing USD800million in the Russian Federations dairy
industry over eight years. RUSMOLKO, which, having a sufficiently
large population of cattle, may be one of the largest producers of
beef in the future.
14 https://www.rabobankamerica.com/content/documents/Rabobank_Crossroads_
for_Growth_September2011.pdf.
78
Meat processing
The Cherkizovo Group bought the meat processing plant
Otechestvenny Product in the Kaliningrad Region for
USD4.1million. The group also absorbed the debt of the acquired
company (USD1.7million). The group plans to focus on delicacy
products such as smoked meat, hams, salamis and cooked
sausage products. The plant has high potential owing to its location
in the free economic zone with certain customs preferences.
EGO-Holding gained control (51 percent of shares) of Kornshtadt
meat processing plant (KMPP) for USD15million. The business
plans to return KMPP to the first place in the market in the coming
years.
JSC Siberian Agricultural Group acquired 75 percent of the stakes
in JSC Meat concern Kamensk-Ural (Micom) from LLC Group
Sinara in order to vertically integrate it into the agricultural holding
LLC Pig Farm Ural.
The rise of agroholdings

The Russian meat sector is formed by a multitude of companies, the
majority of which are vertically integrated holdings. These holdings
are often parts of larger financial groups that also do business in
other sectors of the economy. The major Russian agroholdings
involved in meat production produce feed grains to make their own
compound feed, raise livestock and poultry, have slaughter and meat
processing facilities and engage in meat marketing.
In 2011, there were more than 250 agroholdings in the Russian
Federation that farmed on 15.5million hectares of arable
land (there are 113million hectares in the country). About 40
agroholdings farm on more than 100000hectares each15.
The biggest agroholdings operating in the meat sector are Mirtorg
Agroholding, Cherkizovo Group and BEZRK-Belgrankorm.
Miratorg Agroholding
The company began operating in the mid-1990s as a meat
importer. By 2000, it had established a joint venture with Sandia, a
Brazilian company, in meat processing in the Russian Federation.
15 D.Rylko, Director of IKAR Russian New Agricultural Operators (Agroholdings):

Emergence, Performance, and Impact on the Domestic and World Agriculture and
Agribusiness (https://moel.uni-hohenheim.de/fileadmin/einrichtungen/moel/
Downloads/Rylko_Russian_Agroholdings_Oct_2011.pdf).
79
Following the introduction of the TRQs on meat imports in mid2000, the company engaged in domestic pork production. The
company farms about 150000hectares16 .
Along with its subsidiaries, the holding is engaged in the
production of grain and compound feed for animals; pork
production; livestock slaughtering and meat processing; production
of ready-to-cook food; and transportation. The companys products
include cutlets, dumplings, chilled and frozen fish and seafood,
frozen vegetables, lasagna, pizzas, poultry, salami and spring rolls.
It also operates a network of cold storage facilities, as well as
distributes food products to retail chains, processing plants and
the food service sector. The company is based in Moscow with
offices in Saint Petersburg, Kaliningrad, Belgorod, Yekaterinburg
and Rostov-on-Don. Miratorg Agribusiness Holding operates as a
subsidiary of Agromir Limited.
Cherkizovo Group
The Cherkizovo Group is a leading Russian, vertically integrated,
agroholding company with operations spread across the full
production cycle from feed production and breeding to meat
processing and distribution. The holding company was formed in
2005 through a merger of the Cherkizovsky and the Michailovsky
agro-industrial groups.
Cherkizovo Group is a publicly listed company quoted on the
London Stock Exchange (LSE: CHE17 and RTS/MICEX). It is the
largest meat manufacturer in the Russian Federation and one of
the top three companies serving the Russian Federations poultry,
pork and meat processing markets.
The company is also the countrys largest producer of fodder. The
group includes:
16 Ibid.
17 http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/
summary/company-summary.html?fourWayKey=US68371H2094USUSDIOBE.
80
s even full-cycle poultry production facilities, with a total

capacity of 400000 tonnes in live weight p.a.;
1
4 modern pork production facilities with a total capacity of
180000 tonnes in live weight p.a.;
s ix meat processing plants with a total capacity of
190000tonnes p.a.;
six fodder plants with a total capacity of 1.4million tonnes p.a.;
g
rain storage facilities with a total storage capacity exceeding
500000 tonnes;
a land bank exceeding 100000hectares.
In 2012, Cherkizovos consolidated revenue exceeded
USD1.5billion, and its net profit amounted to USD225million.
Within the last five years alone, Cherkizovo has invested more than
USD1billion into the development of the Russian Federations
agriculture sector.
BEZRK-Belgrankorm
This agroholding is comprised of 18 production units of different
specializations and integrated around feedstuff production since
1987. This integration lowers the production costs of poultry
and pork. Since 1998, when its meat production business line
was launched, BEZRK-Belgrankorm has been developing fast to
become one of the biggest broiler meat producers in the Russian
Federation, employing over 1000 people. The company produces
high quality compound granular and expanded fodder, as well as
pork, broiler meat and eggs, milk, processed meat products and
pre-prepared foods.
Short profiles of major meat producers in the Russian Federation
are provided in Annex 7.
Key financial indicators of agroholdings and their

benchmarks compared with world producers
Despite a relatively low level of industry consolidation and
various issues faced by Russian meat producers, the key financial
indicators largely compare favorably with those of the global meat
producers and, to a certain extent, look even more favorable in the
future (see Table 35).
81
82
2.13
-5.47
1.82
-1.56
2.38
0.19
7.05
3.44
2.28
Pilgrims Pride
Sanderson Farms, USA
Brasil Foods, Brazil
Marfrig, Brazil
CP Foods, Thailand
DaChan Food, China
LDC, France
Cherkizovo, Russia
MHP, Ukraine
2.31
2.95
7.17
N/A
2.75
0.29
2.14
2.96
0.65
2.02
2012
2.69
3.12
7.93
N/A
3.16
0.40
2.48
4.91
0.91
2.31
2013
5.8
4.4
12.0
N/A
13.5
38.5
15.9
17.3
10.6
8.9
2012
P/E
5.0
4.2
10.8
N/A
11.7
28.0
13.7
10.4
7.5
7.8
2013
2302
1499
992
231
10868
6827
18970
1432
3198
7998
EV
426
319
226
N/A
1.045
1.003
1923
170
453
1833
2012
EBITDA
491
351
225
N/A
1210
1164
2272
235
539
1996
2013
5.4
4.7
4.4
N/A
10.4
6.8
9.9
8.4
7.1
4.4
2012
4.7
4.3
4.4
N/A
9.0
5.9
8.4
6.1
5.9
4.0
2013
EV/EBITDA
802
718
-139
1462
4618
2808
274
1432
1466
Net
Debt
2.0
3.0
0.0
-0.5
2.3
4.8
1.8
-3.0
-8.6
0.8
Net Debt/
LTM EBITDA
* Rabobank Poultry Quarterly: Outlook for Global and Regional Markets, April 2012 http://www.rabobank.de/uploads/media/Rabobank_Poultry2012_01.pdf.
Source: Bloomberg, 2012 as reported by Rabobank*.
1.89
Tyson Foods, USA
2011
EPS
Table 35: Key financial indicators of world meat producers, 2011-2013
Recent investments in the meat sector

The Russian meat sector has been recently experiencing an
investment boom thanks to growing demand and state support
programmes. According to our estimates, based on available
information on the ongoing and planned investments in 2009-2014,
it is clear that poultry production has been a leading subsector,
attracting about 44 percent of all investments in the meat sector
(see Table 36). Investments in the poultry sector were mainly
focused on rehabilitation and construction of new plants and
facilities.
Information on poultry investment projects, investors, regions,
declared investment value, anticipated production capacity and
starting year are provided in Annex 8.
Considering the ongoing boom in domestic broiler meat
production, as well as the fact that poultry production facilities
are usually located close to main consumption centers, we built
an investment model to assess profitability of a potential start up
broiler meat production in Far East Russia. Box 5 contains the main
findings of our analysis, and Annex 9 contains information on the
main variables and assumptions and describes their sensitivity to
changes in key variables.
83
Box 5: Investment in broiler meat production in the Russian Federation: low

profitability with high sensitivity to risks
The potential investment considered in this analysis was located in the Far East Russia.
It envisaged construction of a large-scale broiler meat production with a capacity to
produce up to 7.6million broilers per year. The total investment needs for this project
were assessed at RUR1.1 billion.
The results of this model showed that with a nine year discounted payback period and a
10 percent p.a. discount rate in Russian roubles (RUR), this investment promises to be
marginally profitable with the following main financial results: positive net present value
(NPV) of RUR0.5 billion; internal rate of return (IRR) of 15 percent (as compared with
the discount rate of 10 percent used in the calculations).
Although these results show potential profitability, this investment was very sensitive
to changes in the key variables. For instance, the feed costs, which are the major cost
to poultry producers, can be highly volatile in recent years. In our investment model, a
10 percent increase in compound feeds prices from the levels anticipated in the model
(RUR12.48 per one kilogram of compound feed) changed investment profitability to be
negative.
From this perspective, investment in broiler meat production can be a rather risky
business in the Russian Federation, especially, considering long payback period and
other risks, such as poultry diseases. However, the same is true for broiler meat
producers in other countries as they also face the same constraints and tend to operate
on low margins.
Improved feed conversion rates, on the other hand, would help increase returns on
investment in broiler meat production in the Russian Federation. For instance, the feed
conversion rate assumed in our model was 1.92 kilogram of compound feed per 1 kg
of broiler weight. If the feed conversion rate would be reduced to 1.75 kilogram of feed
the result already achieved by some companies in Russian Federation this start up
investment would show the following profitability results: NPV of RUR0.8 billion; IRR of
18 percent; discounted payback period of 8 years.
Pork and beef were the second and third subsectors, attracting
USD2.4 billion and USD1.1 billion of investments respectively
(33percent and 15 percent of the total of meat sector
investments) according to our estimates (see Table 36).
Construction of new livestock complexes has been a major objective
for national and regional governments. More information on specific
investment projects in this subsector can be found in Annex 10.
According to the Ministry of Agriculture, in 2009-2010 beef cattle
inventories increased by 409100heads as Russian farmers built
and modernized 168 facilities for beef cattle production. These
new production sites run over 60000heads of cattle. The leaders
in this new subsector were the Republic of Kalmykia, Altay Kray,
84
Republic of Bashkortostan and Bryansk Region. Farmers invested

in construction of new barns as well as purchase of beef cattle.
Annex 11 contains short descriptions of the recent investment
projects in the beef sector.
It should be also noted that the recent global economic recession
has forced some agricultural companies to review their ambitious
business expansion plans and put some meat projects on hold. For
instance, the Russian Farms Group postponed the construction
of a RUR3.5 billion dairy farm in Lipetsk Region; Miratorg
suspended its cattle meat project in Bryanks Region; the Rubezh
Group cancelled the planned expansion of the Myasnye delikatesy
meat processing plant in Saint Petersburg; and Optifood Group
postponed its poultry project in the Rostov Region.
Meat processing
The meat-processing sector was estimated to attract about
USD537million in investments, based on the information provided
in Table 37. It should be noted that the information on investments
provided in this table was gathered through open information
sources. Considering the low levels of concentration in the meat
processing industry, it is likely that these estimates of investments
are somewhat underestimated.
85
Table 37: Recent investments in meat processing facilities

Name and brief project
description
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project at
full
capacity
Slaughter and processing

plant for beef cattle
operation
Prodcontract
Group
Republic
of
Kalmykia
166.7 (total
for vertically
integrated
complex)
New meat processing

plant in Gorelovo with a
daily capacity of 90 tonnes
of hot dogs, sausages and
cooked sausages under
the brand Pit-product.
Atria Group
Leningrad
Region
93.3
Zarechnoe
Voronezh
Region
10 (estimate)
2011
2012
Slaughter and prime

processing plant with a
capacity of 22.5 tonnes of
chilled pork meat per day.
The company targets the
retail market of Russia.
LLC GC AgroBelogore
Belgorod
Region
117
2009
2009
Commissioning of
slaughter and primary
processing of pork with
full capacity of 2million
heads.
AIH Miratorg
Belgorod
Region
150-200
estimate
Construction of a
slaughterhouse for cattle
in Ramonsky District with
a capacity of processing
and cutting 30heads
of cattle per hour (hph),
expandable to 50 hph.
The project involves
creation of the genetic
center of Aberdeen
Angus and Hereford and
feedlots for 20thousand
animals. The total project
cost is RUR6 billion
(USD200million).
2010
2010
86
3rd quarter
2012
2009
Chapter 6 - Meat trade

Imports and exports of meat and meat products
Imports
Imports of meat and edible meat offal decreased from 3.3million
tonnes in 2007 to 2.4million tonnes in 2012, or by 27 percent. This
was largely because of a drastic 64 percent decrease in poultry
meat imports. Prior to 2010, poultry meat was the main kind of
meat imported into the Russian Federation. It is now third after
pork and beef. Imports of edible meat offal for further processing
have been quite stable at about 300000 tonnes per year (see
Figure 43).
The most notable increase was in chilled beef imports, which
responded to growing consumer demand for quality beef cuts.
Imports of chilled beef almost doubled from 21000 tonnes in
2007 to 41000 tonnes in 2012 (see Figure 43). Pork imports,
despite a short drop in 2009-2011, increased again in 2012. In 2012,
the Russian Federation imported 7 percent more pork than in
2007. This was largely due to increased imports in July-December
2012 due to lower import tariff protection following the Russian
Federations accession to the WTO.
87
Figure 43: Imports of meat and meat products, 2007-2012

3 500
3 000
21
307
247
20
321
267
thousand tonnes
2 500
2 000
1 287
12
298
20
256
292
36
266
291
1 218
1 000
650
713
500
672
0
2007
289
280
948
1 500
41
273
470
404
791
791
2008
585
624
606
567
636
641
657
720
2009
2010
2011
2012
0201 Beef
0207 Poultry (fresh and frozen)
0206 Edible meat offal
0202 Beef (frozen)
0209 Pig/ Poultry fat
0203 Pork (fresh and frozen)
Source: Russian Customs Committee as reported by the Global Trade Atlas.
In value terms, the Russian meat import bill increased from USD5
billion in 2007 to 7 billion in 2012 (up 38 percent), largely due to
increases in beef import volumes and prices. Beef is the most
important meat in the structure of meat imports. The structure of
meat imports into the Russian Federation in 2012 is provided in
Figure 44.
88
Figure 44: Structure of the value and quantity of imported

meat products, 2012
1 0
90
80
percent
70
396
219
460
474
707
60
50
2 407
737
27
41
273
289
40
470
30
20
2 583
10
0
Value,
million USD
Beef (frozen)
Pork (fresh and frozen)
Poultry (fresh and frozen)
585
Quantity,
thousand tonnes
Edible meat offal
Beef (chilled)
Other kinds of meat
Pig/poultry fat
The declining trend in poultry imports is due not only to the

reduced quota but also to the restrictions on chlorine content in
meat, which the Russian Federation implemented following the EU
on 1 January 2010. This regulation has effectively restricted imports
from the USA.
There is a pronounced seasonality of meat imports due to the
Russian Federations specific consumption patterns: high demand
before the seasonal festivities and low demand during Lent. Import
tariff-rate quota is another factor affecting distribution of imports
throughout the year. Usually the government starts issuing import
licenses for 25 percent of the annual quota volume in mid-January;
therefore, the import shipments arrive in February-March. May and
June see high sales because of summer picnics and barbeques.
And the last months of the year register the biggest imports
as importers rush to use their quotas and build the stocks for
December-February sales.
89
Figure 45: Major importers of meat to the Russian Federation,

2010-2012, average
Beef
16%
Brazil
7%
Paraguay
44%
7%
Uruguay
United States of America
Australia
Others
12%
14%
Pork
17%
23%
Canada
Brazil
24%
Germany
11%
Denmark
Others
10%
15%
Poultry
6%
2%
5%
Brazil
32%
55%
Ukraine
France
Argentina
90
Annex 12 contains detailed official Russian trade statistics for all

main meat producers by value, quantity of imports and exports,
average product values, main suppliers and monthly trade series.
As can be seen from Figure 45, major exporters of meat to
the Russian Federation are the USA (poultry, pork, beef), Brazil
(poultry, pork, beef), the EU (live pigs, pork, mechanically
separated poultry, beef), Canada (pork, by-products), Australia,
Uruguay and Paraguay (all beef).
The bulk of imported poultry (over 85 percent) goes into retail
and is mainly sold on open markets and in small stores in rural
areas. About 10 percent is further processed, and the rest is
marketed through retail as further processed products. Almost
all imported beef and pork is frozen (beef at 98 percent, pork at
99.5 percent), and most of it (over 80 percent) goes for further
processing. Importers enjoy steady demand for these products
from processors thanks to a consistent quality and lower prices
compared to similar domestic products.
Exports
The Russian Federation doesnt export any meat except for poultry.
These exports have grown, if on a small scale, in the category
of chicken by-products (feet) that is largely requested by SouthEast Asia (mostly Hong Kong). The Russian Federation has also
traditionally supplied its neighbors in the Commonwealth of
Independent States (CIS); however, the quantities of meat exports
to those countries are marginal (see Figure 46).
Figure 46: Meat exports from the Russian Federation,
2007-2012
thousand tonnes
25
20
15
10
5
0
2007
2008
0207 Poultry meat
2009
2010
0210 Meat & Ed

Offal Salted, Dried
Etc. & Flour & Meal
2011
2012
Other meat products
91
Russian meat is higher priced than the meat from its competitors.
Some minor shipments of meat for ship crews, military bases and
offshore, state-owned production facilities also get recorded in the
official exports statistics.
The National Livestock Development Strategy until 2020 sets the
goal for exporting 400000 tonnes of poultry and 200000 tonnes
of pork by 2020. However, it is doubtful these export targets
will be met as domestic meat prices remain well above other
suppliers. Since there is still some room for domestic beef and
pork market growth, these should probably be the primary areas
for addressing domestic competitiveness issues.
However, the Russian Federation still may increase exports of
poultry meat to Central Asia, Caucasus (Armenia and Azerbaijan)
and niche markets in Asia. But the Russian producers will need
to tackle constraints for poultry exports, which include (i) high
production costs, (ii) improved microbiological contamination
indicators (see Box 4 on salmonella prevalence), (iii) absence of
veterinary agreements with the majority of target countries, and
(iv) development of a traceability system.
Exports and imports of processed meat products
The value of further processed meat products imported into the
Russian Federation (salami, ham, sausage and other products
falling under the codes 1601 and 1602 of the Harmonized System
[HS]) increased as compared with 2010, while the Russian
Federations exports of the same products to the traditional
markets in the former Soviet Union decreased (see Table 38).
The Russian Federation imports mostly pork-based sausages and
different kinds of hams from the EU.
92
Table 38: Imports and exports of processed meat products,

2010-2012
Million USD
Commodity
(HS Code)
and trade
flow
Description
1602, Import
Prepared or
preserved meat,
meat offal
1601, Import
1602, Export
1601, Export
Main
Percent
change
2010
2011
2012
2012/
2011
Spain,
Germany,
France,
Hungary
119
197
172
44
Sausages, similar
product meat, etc.
Lithuania,
Spain, Latvia,
U.S.
27
54
69
157
Prepared or
preserved meat,
meat offal
Turkmenistan,
Azerbaijan,
Georgia
14
15
15
Sausages, similar
product meat, etc.
Azerbaijan,
Armenia,
Georgia
36
10
10
-73
Source: Customs Committee of Russia as reported by the Global Trade Atlas.
Impact of bilateral agreements: the Russian Federation

and the Customs Union
Russian bilateral trade agreements with Ukraine and Russian
customs union with Belarus and Kazakhstan have a great impact
on the countrys meat market. The impact can be clearly seen from
the increased imports of poultry meat from Ukraine under the freetrade agreement; these imports are not constrained by the Russian
meat import TRQ or import duties, shown in Table 53 in Annex 12.
Trade with Belarus and Kazakhstan is rarely seen now in the
official customs statistics. In 2010, pork and beef exports from
Belarus to the Russian Federation increased by 37 and 28 percent
respectively compared to 2005, according to the data reported by
Belarus to UN Comtrade. Poultry trade from the Union partners
boomed with some 38000 tonnes sold, almost quadrupling in
2010, as a result of Belaruss expansion towards the Russian
market (see Figure 47).
93
Figure 47: Belaruss export quantities and average free on

board (FOB) prices of poultry meat to the Russian Federation,
1998-2010
45 000
2.50
40 000
35 000
2.00
25 000
1.50
20 000
15 000
1.00
10 000
0.50
5 000
0
1998
2000
2002
2004
Export quantity
2006
2008
2010
Avg price
Source: UN Comtrade.
As can be seen from Figures 48 and 49, within the Customs

Union, Belarus is the biggest supplier of meat to the Russian
Federation, accounting for 94 percent of exports to the Russian
Federation, which absorbs over 99 percent of Belaruss total meat
exports. Belarus ships mainly beef (64 percent of its meat exports
to the Russian Federation in 2010, on volume), pork (19 percent)
and poultry meat (another 19 percent). Belaruss meat is pricecompetitive thanks to domestic price and trade control measures
and because all exports are conducted through the state trading
companies.
It is not clear to what extent Belarusian exports of meat will
be influenced by the Russian Federations WTO accession and
the improved market access for other suppliers. The Belarusian
producers and exporters are generally believed to be supported
by the state. As Belarus, the Russian Federation and Kazakhstan
create the Single Economic Space, they will have to coordinate
domestic support policies as well. This issue has already been
brought up and is believed to be the main reason behind Belaruss
occasionally voluntary restrictions on exports to the Russian
Federation.
94
USD/kg
tonnes
30 000
Figure 48: Russian imports of pork from the Customs Union

and Ukraine, 1995-2011
70
thousand tonnes
60
50
40
30
20
10
0
1995
1997
1999
2001
Kazakhstan
2003
Belarus
2005
2007
2009
2011
Ukraine
The availability of beef for suppliers to the Russian Federation from

Ukraine and Kazakhstan is low. Therefore, Belarus will likely remain
the only sizable beef supplier with which the Russian Federation
has a free-trade agreement (see Figure 49).
Figure 49: Russian imports of beef from the Customs Union
and Ukraine, 1995-2011
250
thousand tonnes
200
150
100
50
0
1995
1997
1999
2001
Kazakhstan
2003
Belarus
2005
2007
2009
2011
Ukraine
95
Chapter 7 - Meat prices

Poultry, pork and cattle prices in 2005-2010 were on a rise in the
Russian Federation. The average annual growth of prices for cattle
and poultry18 in live weight was as follows (see also Figure 50):
poultry: 30 percent;
swine: 38 percent;
cattle: 64.5 percent.
Prices for cattle grew much faster than prices for pigs, which is
explained by the gradual reduction of livestock inventories for
slaughter.
Figure 50: Annual average poultry, pork and cattle live weight
prices, 2005-2010
75 000
69 263.4
70 000
69 748.3
65 000
60 988.3
60 000
54 371.4
55 000
50 000
50 420.4
51 821.0
49 050.6
43349.7
40 813.4
40 000
45 074.8
39 821.9
41 762.2
39 235.4
35 000
34 003.1
2005
2006
2007
Poultry and other farming birds

18 For all fatness classes.
96
54 229.5 52 966.3
45 641.0
45 000
30 000
55 950.5
2008
2009
Swine
2010
Cattle
The prices for cattle in live weight and slaughter weight are closely
correlated considering typical slaughter yields from the live weight
basis (0.75 for poultry, 0.6 for pork and 0.45 for beef).
Prices for cattle differ greatly depending on the region and
category of meat. For instance, the average price for first category
hogs in live weight as of December 2010 in the Central Federal
District was 72.1RUR/kg (excl. VAT) as compared with 134.4RUR/
kg (excl. VAT) in the Far Eastern Federal District.
The average annual prices for meat and meat products also had a
clear upward tendency, reflecting increasing incomes and producer
and consumer prices in the Russian Federation19. In 2005-2010,
annual meat prices increased as follows:
5.5 percent for poultry meat;
8 percent for pork;
13 percent for beef;
4.4 percent for edible subproducts (livers, etc);
14.5 percent for cooked sausage products;
13 percent for further processed meat products;
9 percent for canned meat products.
The trend of increasing prices of meat products is shown in
Figure51.
19 As per FSSS of Russian Federation, the average inflation level amounted to 10.5
percent for 2005-2006.
97
Figure 51: Prices for raw and processed meat products, annual
average, 2005-2010
141 128.7
14 000
127 502.1
12 000
115 673.7
10 000
8 000
6 000
82 345.1
81 896.5
84 363.5
77 008.9
71 333.1
70 865.3
58 371.7
55 683.6
51 283.0
38 662.4
4 000
2 000
27 081.5
2005
2006
Sausage and cooked meat

Pork
Beef
Animal slaughter sub-products
2007
2008
2009
2010
Poultry
Semi-prepared foods from meat pork
Meat cans (thousand pcs)
The increase of prices for sausage products is closely correlated

with the trend of higher consumption of more expensive sausage
products as a result of growing incomes. Canned meat has
traditionally been a low-end segment as it is made of the less
valuable parts of animal carcasses like the trimmings. Therefore,
the price increase of canned meats is less pronounced compared
with that of precooked meat and sausage products.
In general, the price dynamics are consistent with the inflation rate
or they slightly exceed it, with the exception of poultry and edible
by-products. The average annual price increase for such products
remains below the average inflation rate due to a relatively higher
supply.
98
Chapter 8 - Policy
Agricultural policy goals
The agricultural policy of the Russian Federation is an integral
part of the states socio-economic policy 20. The policy is aimed at
sustainable development of agriculture and rural areas. The main
objectives of the agrarian policy are:
increasing competitiveness of Russian agriculture and
agricultural producers and improving quality of food products;
ensuring the sustainable development of rural areas and
employment and improving living standards in rural areas;
preservation and reproduction of natural resources used in
agricultural production;
creation of a well-functioning market for agricultural products,
raw materials and food and increasing profitability of
agricultural producers;
creation of a favourable investment climate and increasing
investment in agriculture; and
maintaining price parity between agricultural products and
industrial inputs used in agriculture.
The agricultural support system in the Russian Federation has
been driven by a progressive orientation of policies towards
import substitution and achievements of self-sufficiency. In order
to implement national agricultural policy goals, the government
has developed sector and subsector development programmes,
such as the State Programme for the Development of Agriculture
and Markets of Agricultural Products, Raw Materials and Food for
2008-201221 or 2013-202022. The livestock and poultry sectors are
integral parts of these agricultural development programmes.
The agricultural policy objectives have been pursued at relatively
high costs to Russian taxpayers and consumers as the majority of
support is provided through market price, variable input use and
20 The Federal Law on Agricultural Development: http://base.consultant.ru/cons/cgi/
online.cgi?req=doc;base=LAW;n=126592 in Russian.
21 http://www.mcx.ru/documents/document/v7_show/1348.145.htm in Russian.
22 http://www.mcx.ru/navigation/docfeeder/show/342.htm in Russian.
99
fixed capital formation in agriculture (investment subsidies and

interest rates)23, which are amongst the most distorting measures.
According to the OECD data the PSE which measures the annual
monetary transfers from consumers and taxpayers to farmers
arising from policy measures that support agriculture (regardless
of their nature, objective and impact) amounted to around half of
a trillion RUR, on average 22 percent from RUR2.1 trillion of the
total value of agricultural production in the Russian Federation in
2008-2010. Within the PSE, transfers to producers of poultry and
livestock totaled about RUR227 billion per year on average (20082010), which comprises 44 percent of all transfers to all farmers
measured by OECD24 through the PSE.
Livestock and poultry in the context of agricultural

support polices and measures
The indicators of the MPS are key to assessing support levels
enjoyed by producers. In 2008-2010, about 65 percent of all
transfers to Russian farmers were because domestic agricultural
prices were higher than comparable world reference prices at a
farm-gate level.
The specific composition of the MPS for key agricultural
commodities in 2008-2010 is illustrated in Figure 52. The negative
price support of wheat, maize, sunflower seed and other grains
indicates that producers of these commodities are taxes in the
Russian Federation because of their low domestic prices. Because
domestic prices for beef, pork and poultry meat are much higher
as compared with international reference prices, poultry and
livestock farmers receive significant transfers from consumers
(who have to pay more for domestic products).
Beef and veal, pork and poultry meat account for 9 percent,
20 percent and 15 percent (44 percent in total) of all transfers
measured by the PSE. Therefore, the meat sector is the most
23 Please refer to OECD Producer Support Estimate Manual (http://www.oecd.org/

tad/agricultural-policies/psemanual.htm) for specific definitions and classifications
of support programmes.
24 OECD PSE Database for the Russian Federation Producer and Consumer
Support Estimates database http://www.oecd.org/agriculture/agricultural-policies/
producerandconsumersupportestimatesdatabase.htm#country.
100
significant beneficiary of the state support policy in the Russian

Federations agriculture sector.
Figure 52: Market price support of specific products in the
Russian Federation, 2008-2010, average annual
120
25
102
98
100
67
60
15
44
40
10
er
ra
in
lo
MPS (left axis)
es
m O
od th
iti er
es
m
co
gs
Eg
ta
to
Po
m
ea
t
try
gm
ea
t
ul
Po
Pi
ef
an
d
M
ilk
-16
Be
-27
ve
al
Su
ga
r
-40
-24
Su
-11
-20
nf
er
g
th
12
W
he
at
M
ai
ze
20
percent
RUR billion
20
75
80
Share in total PSE all transfers (right axis)
Source: Authors presentation based on the OECD PSE Database.
The government support policies have placed importance on

stimulating growth of livestock production through border
protection measures (both tariff and non-tariff) to support domestic
prices and investments in fixed capital and new farms (via interestrate subsidies and grants). Livestock producers also benefit from
domestic grain prices that are lower than international ones.
Competitiveness with imports

The MPS indicators reflect the gap between domestic and
international import parity prices; therefore, they act as indicators
of domestic products competitiveness with imported products of
comparable quality under the conditions of no import protection (like
import duties, sanitary and phytosanitary measures [SPS], etc.).
The improvement of the domestic industrys competitiveness is
one of the major goals of the Russian Federations agricultural
policy. In order to illustrate trends in competitiveness of domestic
products, we calculated the MPS per 1 tonne of poultry, pork and
beef using information provided by the OECD (see Figure 53).
101
Improving competitiveness between domestic products and

imports means reducing the gap between domestic and import
parity prices to zero (MPS =0). However, it is evident from Figure
53 that the gap between domestic and international prices only
increased, from USD470-900 per 1 tonne for various meats in
2001 to USD900-1200 in 2010. In fact, domestic beef was more
competitive with imports than poultry and pork was, as beef had
a lower MPS. It is clear that the protectionists policies have not
improved competitiveness of the domestic industry so far.
Figure 53: Market price support for meat in the Russian
Federation, 2001-2010
2 500
USD/tonne
2 000
1 500
1 000
500
0
2001
2002
2003
2004 2005
Poultry
2006
Pork
2007
2008
2009
Beef and veal
Source: Authors calculations based on the OECD PSE Database.
Specific budgetary support programmes

At the end of 2011, the Russian Federation implemented the
following major federal programmes for the development of
livestock production and meat processing:
102
2010
S
tate Programme for the Development of Agriculture and
Markets of Agricultural Products, Raw Materials and Food for
2008-2012;
s ector-targeted programme: Development of pork in the
Russian Federation for 2010-2012;
s ector-targeted programme: Development of beef cattle in the
Russian Federation 2009-2012;
sector-targeted programme: Development of the poultry
industry in the Russian Federation for 2010-2012 and the period
up to 2018-2020;
s ector-targeted programme: Development of the primary
processing of livestock in 2010-2012.
Government support measures contribute to the development of
the livestock industry by subsidizing interest rates on short-term
investment credits and supporting livestock breeding and various
regional programmes. State subsidies for livestock production
from the federal budget amounted to RUR22.8 billion in 2011
and another RUR27 billion for the dairy sector, which is closely
linked to the beef market. More than 3000 projects were already
accomplished in the meat and dairy industries under these
programmes.
Subsidized loans and interest rate subsidies
Following the State policy of reconstruction and development of
the Russian Federations agricultural complex infrastructure, OJSC
Russian Agricultural Bank and OJSC Sberbank of Russia began
to provide long-term (up to ten years) loans for investments in
agricultural projects, including livestock farming. Interest payments
on loans may be deferred for up to 36 months.
In 2010, compensation of interest rates to agricultural producers
was administered by the Resolution of the Russian Federation
Government of 4 February 2009 N90. Agricultural producers were
entitled to reimbursement of interest on investment loans and
loans to replenish working capital; reimbursements were received
in Russian banks in the form of subsidies from the budget. This
resolution covered loans for construction, reconstruction and
modernization of cattle-breeding complexes and farms, livestock
and feed production facilities, slaughterhouses and cold stores.
In 2010, the Federal budget compensated RUR62.8 billion in
interest rates, of which RUR45.1 billion were subsidies on
investment loans and RUR17.7 billion were short-term credits.
103
In 2010, the Government of the Russian Federation continued

implementing the package of anticrisis measures in the agricultural
sector:
c ompensation from the federal budget on investments and
short-term loans remained at 80 percent of the refinancing rate
of the Russian Central Bank, and compensations from regional
budgets remained at up to 20 percent;
c ompensation of the 100 percent refinancing rate of the
Central Bank was guaranteed to agricultural producers engaged
in the production of cattle meat and milk and for short-term
and investment loans aimed at construction, reconstruction
and modernization of livestock complexes and farms, cattle
receiving points and/or primary processing of farm animals and
milk;
s ubsidies on loans for refinancing previously made investments
were kept in full.
The Interagency Commission for the coordination of crediting
issues of the agro-industrial complex held 13 meetings and
selected 748 subsidized investment projects with the total amount
of credit of RUR197.3 billion in 2010 (see Table 39), a 40 percent
increase as compared with the RUR112.7 billion that were
approved in 2009.
104
Table 39: List of investment projects in agriculture selected for

subsidies, 2010
Number of
projects
Loans
amount,
billion RUR
Subsidies
from the
federal
budget,
billion RUR
Construction,
reconstruction and
modernization of livestock
facilities, including poultry
farms (with breeder farms)
492
154.81
2.36
Construction,
reconstruction and
modernization of facilities
for primary processing and
grain storage
105
25.99
0.34
Construction,
reconstruction and
modernization of facilities
for primary processing of
meat and milk
43
7.75
0.18
Construction,
reconstruction and
modernization of sugar
mills
29
4.52
0.13
Other
79
4.23
0.07
Total
748
197.3
3.08
Description
Source: National report On the progress and results of implementation in 2010

of the State programme of agricultural development and regulation of markets for
agricultural products, raw materials and food in 2008-2012.
The Ministry of Agriculture, together with the administrations of

the Russian regions, selected 57 new investment projects in 2010
for beef cattle breeding with the total amount of requested loans
valued at RUR31.4 billion (USD1.05 billion):
105
V
neshEconombank signed loan agreements for at least one
investment project Bryansk Meat Company for RUR20.4
billion (USD680million);
O
AO Rosselkhosbank signed loan agreements for 35
investment projects totaling RUR4.53 billion (USD151million);
S
berbank of Russia signed loan agreements for 14 investment
projects totaling RUR596million (USD20million).
Along with the strict requirements of the value of the collateral
and turnover, the borrowers are facing other difficulties such
as bureaucratic barriers and the requirement of extensive
documentation to obtain a loan.
Subsidized leasing
The government of the Russian Federation established the state
company OJSC RosAgroLeasing in 2001 to provide domestic
agricultural producers with modern agricultural technology, hightech equipment and highly productive breeding cattle. The new
national system of agrarian financial leasing started functioning in
2002. RosAgroLeasing offers its clients the following services:
extended loan repayment period of up to 10-15 years vs. 7-8
years of maximum bank loans;
opportunity to purchase modern equipment with minimal down
payment (up to 7 percent vs. 20-30 percent for bank credit);
flexible scheduling of lease payments considering seasonal
fluctuations or other peculiarities of a lessees business activity.
Direct subsidies to support the production and breeding of
livestock
Besides subsidizing interests rates, the government provides
support from regional and federal budgets to agricultural
producers by means of direct subsidies to develop pedigree
livestock breeding (for purchased breeding stock, maintenance of
breeding livestock, etc.). Table 40 provides an example of specific
programmes in the Voronezh Region of the Russian Federation.
106
Table 40: Types and rates of subsidy for beef cattle in the
Voronezh Region
Item
1
1.1
Trade line
Size (subsidiary rate)
From the federal budget

Development of beef cattle
production
1.1.1
For purchase of pedigree cattle

of specialized beef breeds
about 12thousand
RUR/head
1.1.2
For establishing rearing farms

of beef purebred and cross-bred
cattle to the live weight of 450
kg within two years
21RUR/kg of the live

weight
1.1.3
For maintenance of breeding

stock at farms with Cow-Calf
system
3000RUR/head per
year
Reimbursement of interest rates

for loans
80 percent of the CBR

refinancing rate
1.2
2
2.1
Ministry of Agriculture Order

of 6 October 2008 N494
Russian Government Decree

from 4 February 2009 N 90
From the regional budgets

production
2.1.1
For the purchase of pedigree

cattle of specialized beef breeds
65RUR/kg of the live

weight
2.1.2
For purchases of genetic

material
bull semen at
a 50RUR/dose
and embryos at
6000RUR/pcs.
2.1.3
For acquiring equipment for feed

preparation and distribution,
generators for autonomous
power supply, electric fences
20 percent of cost
(VAT excluded)
2.1.4
For the increase of breeding

stock at farms with Cow-Calf
system
4000RUR/head/year
2.2
Base
Reimbursement of interest rates

for loans
20 percent of CBR
refinancing rate
Sector-targeted programme:
in the Voronezh Region for
2012-2013
Russian Federation
Government Decree from
4 February 2009 N 90 (in
the Russian Federation
Government Decree edition
from 31.12.2009 N 1198)
Source: Ministry of Agriculture Order of 6 October 2008 N494; Russian Government

Decree from 4 February 2009 N 90; Sector-targeted programme: Development of
beef cattle in the Voronezh Region for 2012-2013; Russian Federation Government
Decree from 4 February 2009 N 90 (in the Russian Federation Government Decree
edition from 31.12.2009 N 1198).
107
Under the programme Development of Beef Cattle in Russia

2009-2012, the State co-financed 22 regional programmes in 20092010 and allocated RUR6.67 billion (USD222million), including
RUR4.59 billion (USD153million) from the federal budget and
RUR2.1 billion (USD7million) from the regional budgets. Most of
the federal budget has been allocated to regions with traditional
beef cattle breeding: Republic of Kalmykia (RUR910million),
Krasnodar Kray (RUR427million), Republic of Bashkortostan
(RUR426million) and Saratov Oblast (RUR374million.
Subsidized feed
Some domestic poultry producers find it difficult to maintain
profitable operations at the times of high grain and feed prices.
They indicate that higher grain prices translate into an increase
in production costs of about RUR10 per kilogram of meat. In
December 2010, Russian poultry producers appealed to the
Russian Government (GOR) requesting subsidies for domestic
poultry producers to be included in the 2011 budget. The funds
were to be used to reimburse the poultry industry for feed costs
in the first half of the year at the amount of about RUR5 per
kilogram of poultry meat (in live weight). The industry claimed that
without direct subsidies the prices of poultry meat would increase,
customers would decrease poultry consumption, poultry farms
would reduce production and some of them might go bankrupt by
the summer of 2011.
To address the issue of higher feed prices, the GOR sold grain
from the state intervention fund. Interventions started in February
2011 and resulted in a price decrease from the initial level of
RUR8800 per tonne of barley to approximately RUR6150 per
tonne. As an additional measure of support, the GOR also lowered
the freight rates for the transportation of grain and soybeans.
In 2011, the GOR also responded to the requests of the National
Union of Swine Breeders and the Russian Poultry Union to provide
RUR9 billion to the pork and poultry industries in order to offset the
losses caused by high feed prices as a result of the drought in 2010.
Trade measures
Tariff-rate quota
In 2003, the Russian Federation introduced a restrictive quota
to control imports of beef, pork and poultry. The annual quota
for poultry was set at 1.05million tonnes, and the TRQs for beef
108
and pork at around 0.45million tonnes. The restrictive quota on

poultry was then converted in 2006 to a TRQ. In January 2009, the
TRQs for pork and poultry were lowered further, and the out-ofquota tariffs were raised, from 60 to 75 percent and from 80 to 95
percent, respectively.
Figure 54: Volume of tariff quotas for meat commodity groups,
2004-2010
1 400
thousand tonnes
1 200
1 050
1 050
1 130.8
1 171.2
1 211.6
1 252
1 000
780
800
600
400
450
447.5
467.4
457.5
476.1
484.8
493.5
502.2
462.78
468.3
473.9
473.5
2008
2009
560
200
0
2004
2005
2006
2007
2010
Cattle meat, fresh, chilled or frozen (commodity item 0201-0202 of the Russian FEACN)
Pork meat, fresh, chilled or frozen
Poultry meat and giblets, fresh, chilled or frozen (commodity item 0105)
Source: Meatinfo.
The introduction of the quota system was a protective measure

to limit imports and allow for production growth of the domestic
meat industry. Import limitations have helped local producers
gain domestic market shares and increase their margins. A good
example of this is that the biggest importers of meat turned into
major investors in the Russian meat sector: Miratorg, Agroimport,
Optifood, White Frigate, Rubezh and Global Trading, among others.
However, the introduction of quotas seems to have had some
negative effects on the domestic meat market and its production:
market distortion and a negative impact on competitiveness;
l ack of competition with higher quality imported meat products
did not stimulate quality enhancement programmes;
l imited supply caused higher prices and reduced affordability of
meat products for Russian consumers with low incomes.
109
Table 41 describes the volume of tariff-rate quotas for 2012

established by the Decree of the Government of the Russian
Federation of 29 December 2011, number 1194, On distribution of
tariff quotas for beef, pork and poultry meat in 2012.
Table 41: Volume of tariff-rate quotas, 2012
Product name
Quota
volume,
thousand
tonnes
Fresh or frozen bovine meat (CU HS code

0201) - total
30
Including:
European Union
29
Other countries
Frozen bovine meat (CU HS code 0202)

total
530
In quota
tariff
Above
quota tariff
50%
15%
but not less
but not less
than 0.2 EUR than 1.0 EUR
per kilo
per kilo
Including:
European Union
60
United States
60
Costa Rica
Other countries
407
Fresh, chilled or frozen pork (CU HS code

0203) all countries
Pork trimming (CU HS codes 0203 29550

2 and 0203 29900 2)* all countries
400
Frozen bone-in chicken halves or quarters,

(CU HS code 0207 14200 1) frozen bonein chicken legs and their cuts (CU HS code
0207 14600 1) all countries
250
Frozen boneless chicken meat (CU HS

code 0207 14100 1) total, including:
70
European Union
Other countries
56
14
Frozen boneless turkey meat (CU HS code

0207 27100 1) all countries
10
50%
15%
but not less
but not less
per kilo
per kilo
75%
15%
but not less
but not less
than 0.25 than 1.5 EUR
per kilo
EUR per kilo
80%
25%
but not less
but not less
per kilo
per kilo
Source: Custom Union Commission, 2011.

* Pork trimming can be imported using both pork trimming quotas and frozen pork
meat quotas.
110
Comparison of protection of poultry, pork and beef

producers between the Russian Federation and other
countries
The levels of domestic market protection (through a variety of
policy measures, including SPS measures) can be described by
the Producer Nominal Protection Coefficient (NPC). As measured
by the OECD, protection of poultry, pork and beef farmers in the
Russian Federation from import competition in 1995-2010 was
often higher than in other meat producing countries (see Figure 55,
Figure 56, Figure 57). This was largely a result of the protectionist
import-substitution policies.
The level of protection of Russian poultry producers in recent years
was comparable to that in the EU and Ukraine; however, it was far
above protection of poultry producers in the USA, Brazil and China
(see Figure 55).
Figure 55: Poultry: NPC in selected countries, 1995-2010
2.5
2
1.5
1
0.5
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Russian
Federation
Brazil
Ukraine
China
USA
EU
Source: OECD.
Pork producers have enjoyed the highest levels of protection

among all types of meat. In 2010, Russian pork producers received
pork prices at the farm-gate level that were two times higher
than the international import parity prices excluding import tariffs.
Among the countries shown in Figure 56 only Ukraine had a
slightly higher level of protection of domestic producers than that
of the Russian Federation.
111
Figure 56: Pork NPC in selected countries,1995-2010

2.50
2.00
1.50
1.00
0.50
0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Russian
Federation
Brazil
Ukraine
China
USA
EU
Source: OECD.
As for beef, it is clearly seen in Figure 57 that while the EU-27

has progressively lowered import protection of its beef producers
since 2001, the level of protection has remained fairly unchanged
in the Russian Federation in 2005-2010. By 2010, the level of
protection of beef producers in the Russian Federation exceeded
that in the EU, USA, Brazil, China and Ukraine.
Figure 57: Beef NPC in selected countries,1995-2010
2.50
2.00
1.50
1.00
0.50
0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Russian
Federation
China
Source: OECD.
112
Brazil
Ukraine
USA
EU
Comparison of support to poultry, pork and beef

producers between the Russian Federation and other
countries
The levels of support received by producers of specific
commodities can be described by the percentage producer
single commodity transfers (percent SCT), which represents the
commodity transfers to producers from consumers and taxpayers
as a share of gross receipts received by farmers for that specific
commodity. It is also an indicator of the level of support on which
a specific commodity is dependent. As measured by the producer
single commodity transfers (SCT)25, the government support to the
meat sector in the Russian Federation has been particularly high
as indicated in Figure 58, Figure 59 and Figure 60. In 2009-2010,
Russian poultry meat producers received about 40 percent of
poultry meat prices in transfers from producers (who paid higher
prices than they would have paid for comparable quality imported
poultry meat) and taxpayers (who provided funding for government
support programmes). Producers in the USA and Brazil received no
transfers (see Figure 58).
Figure 58: Poultry, percentage SCT in selected countries,
2001-2010
80
60
50
40
30
20
10
0
Russian
-10 Federation
China
Brazil
2001-02
Ukraine
2005-06
USA
EU
2009-10
Source: OECD.
25 Producer SCT is the monetary value of gross transfers from consumers and tax
payers to agricultural producers measured at the farm gate level and arising from
specific policies linked to the production of a single commodity. The Percentage
Producer Single Commodity Transfers (percent SCT) represents the commodity
SCT transfers as a share of gross receipts for the specific commodity.
It indicates the level of support for a specific commodity that is dependent on the
actual production of that commodity.
113
A similar situation is observed with the transfers to pork producers

in the Russian Federation as compared with other countries. In
2009-2010, only Ukraine provided a higher level of support from
its consumers and taxpayers than the Russian Federation. Since
2001, the EU-27 gradually reduced its support to pork producers
to the levels that only slightly exceed the SCT to pork producers in
the USA (see Figure 59).
Figure 59: Pork, percentage SCT in selected countries,
2001-2010
80
60
50
40
30
20
10
0
-10
Russian
Federation
China
Brazil
2001-02
Ukraine
2005-06
USA
2009-10
Source: OECD.
Beef producers in the Russian Federation received about

30 percent of the beef price in transfers from consumers and
taxpayers in 2009-2010. Only the EU provided similar levels of
support to its beef farmers in 2009-2010; however, since 2001
there has been a clear tendency for reduced support to beef
farmers in the EU (see Figure 60).
114
EU
Figure 60: Beef, percentage SCT in selected countries,

2001-2010
80
70
60
50
40
30
20
10
0
Russian
-10 Federation
China
Brazil
2001-02
Ukraine
2005-06
USA
EU
2009-10
Source: OECD.
Impact of policies on industry development and risks

Russian Federations WTO accession
On 16 December 2011, after 17 years of negotiations, the Russian
Federation signed a WTO accession protocol.
On 22 August 2012, the WTO welcomed the Russian Federation as
its 156th member.
As a part of the accession package, the Russian Federation fixed
the level of its Aggregate Measurement of Support to USD9 billion
in 2012 and 2013, which was believed to be two times higher than
the level of agricultural support immediately prior to the accession,
USD4.5 billion per year. However, the Russian Federation will have
to decline to Final Bound Total AMS (Aggregate Measurement of
Support) of USD4.4 billion by 2018.
Market access
The Russian Federation agreed to reduce the average rate of
import duties on agricultural products from 15.1 percent to 11.2
percent. Its WTO commitments regarding agricultural trade
resulted mainly from bilateral negotiations with the USA, the EU
and members of the Cairns Group of agriculture exporters.
115
According to the WTO26, the Russian Federation agreed to reduce

and bind its tariffs on:
dairy products: to 14.9 percent from 19.8 percent;
cereals: to 10.0 percent from 15.1 percent;
oilseeds, fats, and oils: to 7.1 percent from 9.0 percent.
See Table 42 for imports within tariff-rate quotas of beef, pork (until
2020) and poultry.
Table 42: Comparison of the import duties rates, currently
existing in the WTO
Current tariff rate for inquota imports percent
(no less than .xx Euro
per kg)
Tariff rate for in-quota

imports after WTO
accession (no less than
.xx Euro per kg / flat tariff
option)
15 (.50)44
15 (.55-27.5)
Pork
15 (.75)
0 (.65-25)
Poultry
25 (.95)
25 (.80-37.5)
40
Commodity
Cattle
Live pigs
Source: Agroinvestor according to the Ministry of Economic Development and the

Report of the working group on Russian Federations accession to the WTO.
Following WTO accession, the Russian Federation started to

implement its commitments, particularly those regarding meat
import TRQs. For instance, the volumes for 2013s TRQs were
adjusted to meet the Russian Federations WTO commitments as
follows:
p
rovided additional in-quota market access for fresh and chilled
beef (from 33330 tonnes in 2012 to 40000 tonnes in 2013);
p
rovided additional in-quota market access for poultry (from
341330 tonnes in 2012 to 364000 tonnes in 2013).
Country-specific TRQ allocations were made for Russian frozen
beef imports (the EU [60000 tonnes], the USA [60000 tonnes],
26 http://www.wto.org/english/thewto_e/minist_e/min11_e/brief_russia_e.htm.
116
Costa Rica [3000 tonnes] and other WTO member states [407000
tonnes]), Russian fresh and chilled beef imports (i.e. the EU
[29000 tonnes] and other WTO member states [11000 tonnes])
and Russian frozen de-boned chicken imports (i.e. the EU [80000
tonnes] and other WTO member states [20000 tonnes]).
Sanitary measures
Russian restrictions on imports of agricultural products, particularly
meats, have been a sensitive issue in trade relations with the USA,
the EU, Brazil, and other agriculture-exporting countries. As a WTO
member, the Russian Federation will be obligated to adhere to the
provisions of the WTO Sanitary and Phytosanitary Measures (SPS)
Agreement when imposing measures to protect human, animal, or
plant life or health.
The Russian Federation has a practice of using rigid SPS
requirements for imported animal and plant products. The
country has required that imported meats be shipped only from
facilities that are on a Russian government-approved list for
meeting Russian safety requirements. For many exporters, these
requirements have adversely affected exports of meats, especially
poultry, pork, dairy products, grains and oilseeds. Many agricultureexporting countries have argued that the Russian Federations SPS
requirements do not conform to international standards and are
not based on accepted science as required under the WTO SPS
Agreement.
As a result of bilateral accession negotiations with the USA, the
EU and members of the Cairns Group, as well as with the WTO
Working Party, the Russian Federation has committed to:
d
eveloping and applying international standards to SPS through
membership in the Codex Alimentarius, the World Organisation
for Animal Health (OIE) and the International Plant Protection
Convention;
n
egotiating veterinary export certificates that include
requirements different from those of the Customs Union if an
117
exporting country makes a substantiated request to negotiate

such a certificate prior to 1 January 2013;
r efraining from suspending imports from establishments based
on results of onsite inspections before giving the exporting
country the opportunity to propose corrective measures27.
Implications for agriculture
According to the Ministry of Agriculture, the negotiated terms for
agriculture are among the best compared with other countries,
and their main task is to increase competitiveness of Russian
agriculture using the following negotiated favourable terms:
T
he level of state support is allowed to increase to USD nine
billion (for two years); that is a more than 50 percent increase
from the planned RUR170 billion (USD5.6 billion) in 2012.
T
he state support shall be better structured by a shifting
between boxes. While USD nine billion is the limit for
measures in the amber box, there are no limits for state
support within the green box, such as house construction,
roads, infrastructure, subsidies for science, education, training,
irrigation and land reclamation.
S
upport of pork processing will be allocated RUR 6billion in
subsidies annually within three years as an adjustment to lower
import protection.
T
he State Programme 2013-2020 drafted by the Ministry
envisages all measures of support allowed by WTO:
infrastructure development programmes, social development
of rural territories, irrigation and land reclamation.
Moreover, together with associations and industries unions,
the Ministry of Agriculture is developing a number of mitigation
measures necessary for adapting Russian Federation agriculture to
WTO requirements. In particular:
27 World Trade Organization: Working Party Seals the Deal on Russias Membership
Negotiations, 10 November 2011, http://www.wto.org/english/news_e/news11_e/
acc_rus_10nov11_e.htm.
118
p
roposals for the extension of tax concessions for agricultural
producers (tax on profit);
e
xtensions to release agricultural producers from paying VAT on
imported breeding animals, embryos and semen until 2020;
m
easures to strengthen the functions and powers of the
Ministry and the Federal Veterinary and Phytosanitary
Surveillance Service (VPSS);
a dditional authority for the Ministry of Agriculture and VPSS
to increase their staff as a result of the need to adapt to the
conditions of the WTO;
c hanges to the federal law On Agriculture, suggested by the
Ministry, to determine the criteria of regions with unfavourable
conditions for agriculture. Support of these regions will be
treated as a green box measure, which means that support
to farmers in these regions will not be subject to restrictions.
Possible sector-specific implications
The WTO accession will not significantly affect the Russian poultry
meat producers due to the TRQ and the already significant, current
share of domestic producers of the total poultry meat supply.
Selected poultry products will be subject to 25 percent within the
TRQ and (a fairly high) 80 percent outside the TRQ. Therefore, in
the next decade the Russian poultry market will likely see more
competition between domestic producers, rather than between
imports and Russian products.
For pork, the Russian Federation has agreed to a global TRQ of
400000 tonnes for fresh, chilled and frozen pork and a separate
TRQ of 30000 tonnes for pork trimmings. Both TRQs will have
zero in-quota rates. Beginning 1 January 2020, the Russian
Federation will adopt a tariff-only regime for pork with a bound
duty of 25 percent, and it will apply this duty to all imports,
including from countries exporting under its tariff preference
programme. Therefore, pork producers will most likely face the
most serious challenges after WTO accession.
It is not clear if the beef sector will be effectively protected from
import competition by the 530000 tonnes TRQ with 15 percent
within TRQ tariff and 55 percent outside the TRQ tariff. Future
developments will depend on the domestic demand for withinquota fresh and chilled beef.
119
Annex 1 - Distribution of poultry, swine

and cattle inventories by region and type
of farm in 2010
Poultry
Table 43: Number and structure of poultry inventories by
region, 2010
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Russian
Federation
471013.7
369709.6
5522.5
95781.6
Central Federal
District
136541.6
115366.1
373.8
20801.6
Belgorod Region
47646.4
45294.7
18.9
2332.8
Bryansk Region
6609.0
5142.0
6.9
1460.1
Vladimir Region
3622.0
3290.0
25.4
306.5
Voronezh Region
14019.1
8608.2
36.2
5374.7
Ivanovo Region
2963.2
2733.1
2.5
227.5
Kaluga Region
3238.6
2790.9
5.3
442.4
Kostroma Region
3691.8
3521.9
7.1
162.8
Kursk Region
2900.0
1018.5
8.8
1872.6
Lipetsk Region
9745.0
8250.0
8.4
1486.5
11455.7
10954.2
7.5
494.0
Oryol Region
3589.9
978.2
7.3
2604.4
Ryazan Region
5101.3
4362.3
4.8
734.2
Smolensk Region
1566.4
803.8
4.8
757.8
Moscow Region
120
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Tambov Region
5236.1
3711.7
22.4
1502.0
Tver Region
3137.1
2767.2
20.8
349.0
Tula Region
3927.7
3369.6
16.2
541.9
Yaroslavl Region
8092.3
7769.7
170.3
152.2
Northwestern
Federal District
44113.7
42987.4
116.1
1010.2
407.4
378.8
1.8
26.8
Komi Republic
1855.3
1832.3
8.3
14.7
Arkhangelsk Region
2823.8
2789.8
0.2
33.9
0.1
0.0
0.0
0.1
Arkhangelsk Region
(excl. Nenets
Autonomous Area)
2823.7
2789.8
0.2
33.8
Vologda Region
4332.6
4191.2
33.8
107.6
Kaliningrad Region
1595.7
1284.0
15.7
296.0
Leningrad Region
25493.4
25325.2
7.3
160.9
721.5
679.4
40.0
2.1
Novgorod Region
5463.4
5295.9
4.5
163.0
Pskov Region
1420.6
1210.8
4.5
205.3
Southern Federal
District
61633.2
34167.7
734.3
26731.3
Republic of Adygea
3342.1
2567.2
96.8
678.0
230.5
0.5
21.1
208.9
22831.8
12680.3
340.5
9811.0
Republic of Karelia
Including Nenets
Autonomous Area
Murmansk Region
Republic of
Kalmykia
Krasnodar Territory
121
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Astrakhan Region
1551.9
1314.6
27.1
210.1
Volgograd Region
9518.8
4150.8
39.1
5328.9
Rostov Region
24158.2
13454.2
209.6
10494.4
North Caucasian
Federal District
27719.9
13892.6
1764.2
12063.1
Republic of
Dagestan
3012.0
505.2
410.2
2096.7
Republic of
Ingushetia
254.7
0.0
67.6
187.1
Kabardino-Balkar
Republic
3639.7
925.6
831.7
1882.4
KarachaevoCherkessia Republic
2616.6
1096.7
16.1
1503.8
Republic of North
Ossetia-Alania
1692.7
758.3
44.1
890.3
Chechen Republic
1008.1
138.3
7.3
862.4
Stavropol Territory
15496.0
10468.4
387.2
4640.4
Volga Federal
District
94966.6
73632.9
1858.3
19475.5
Republic of
Bashkortostan
10370.2
6649.1
328.7
3392.4
Republic of Mari El
4388.0
3991.8
38.6
357.6
Republic of
Mordovia
8981.0
7881.7
35.4
1064.0
Republic of
Tatarstan
14094.6
11178.5
879.9
2036.3
Udmurt Republic
6447.3
5177.6
11.9
1257.9
Chuvash Republic
2992.0
2284.3
60.4
647.3
Perm Territory
6757.0
6370.9
47.8
338.4
Kirov Region
2174.1
1875.6
4.5
293.9
122
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Nizhny Novgorod
Region
9039.6
7840.2
8.3
1191.1
Orenburg Region
8064.9
5436.4
42.6
2586.0
Penza Region
7698.0
6242.6
28.9
1426.5
Samara Region
3496.7
2026.9
13.8
1456.0
Saratov Region
6581.7
3530.2
229.5
2822.1
Ulyanovsk Region
3881.5
3147.2
128.2
606.1
40284.0
37096.7
191.2
2996.1
1667.9
741.9
26.0
900.0
12139.7
11732.2
96.9
310.6
8293.2
7697.8
46.5
549.0
173.3
99.8
40.9
32.6
3.1
0.6
1.7
0.8
Tyumen Region
(excl. Khanty-Mansy
Autonomous Area-
8116.8
7597.4
3.9
515.6
Chelyabinsk Region
18183.2
16924.8
21.8
1236.5
Siberian Federal
District
55054.9
43651.1
274.5
11129.2
83.0
0.0
2.5
80.5
416.9
239.3
13.0
164.6
23.0
8.3
0.2
14.5
1355.6
1137.0
3.1
215.5
11199.3
7159.2
3.1
3990.0
Ural Federal
District
Kurgan Region
Sverdlovsk Region
Tyumen Region
Including KhantyMansy Autonomous
Area-Yugra
Yamalo-Nenets
Autonomous Area
Republic of Altai
Republic of Buryatia
Republic of Tyva
Republic of
Khakassia
Altai Territory
123
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Transbaikal Territory
643.6
134.8
50.1
488.5
Krasnoyarsk Region
8256.2
6849.4
20.3
1357.8
Irkutsk Region
7228.3
6357.8
49.0
863.7
Kemerovo Region
5850.0
5034.0
6.8
752.0
Novosibirsk Region
9206.2
8150.2
64.0
1026.4
Omsk Region
7233.6
5165.0
29.6
2052.1
Tomsk Region
3559.2
3416.2
16.5
123.4
10699.8
8915.1
19.6
1574.6
Republic of Sakha
(Yakutia)
777.3
719.1
210.2
51.9
Kamchatka Territory
247.6
200.5
6.3
44.4
Primorsk Territory
4289.5
3640.6
2.7
638.7
Khabarovsk Territory
1844.2
1686.3
1.8
156.2
Amur Region
2701.8
2128.4
112.7
460.7
Magadan Region
96.1
74.9
10.2
11.0
Sakhalin Region
587.5
452.9
6.4
128.2
Jewish
Autonomous
Region
143.3
0.5
59.8
83.0
12.4
11.9
0.0
0.4
Far Eastern
Federal District
Chukot
Autonomous Area
124
Swine
Table 44: Number and structure of swine inventories by region,
2010
Russian Federation
All types of
farms
Ag enterprise
Household
farms
Individual
farms
17332.8
11408.8
656.6
5267.4
Central Federal
District
5993.8
5163.4
87.8
742.6
Belgorod Region
2704.0
2641.9
2.2
59.9
Bryansk Region
187.5
115.7
5.0
66.8
Vladimir Region
141.1
122.0
11.6
7.5
Voronezh Region
484.9
291.3
17.3
176.3
Ivanovo Region
15.5
6.5
1.3
7.7
Kaluga Region
64.5
37.5
8.1
18.9
Kostroma Region
46.7
36.6
1.1
9.0
Kursk Region
382.0
320.8
4.0
57.2
Lipetsk Region
411.3
353.8
4.3
53.1
Moscow Region
298.2
280.1
3.7
14.4
Oryol Region
337.3
256.3
3.9
77.0
Ryazan Region
153.5
127.8
1.9
23.9
88.5
67.8
1.9
18.8
Tambov Region
289.6
167.8
9.7
112.1
Tver Region
211.0
189.6
4.2
17.2
Tula Region
119.1
94.1
6.0
19.0
59.0
53.8
1.4
3.7
737.4
639.7
18.8
78.9
Republic of Karelia
15.3
9.5
2.1
3.7
Komi Republic
23.7
15.9
3.5
4.2
Arkhangelsk Region
20.1
10.8
1.2
8.1
Smolensk Region
Yaroslavl Region
Northwestern Federal
District
125
All types of
farms
Ag enterprise
Household
farms
Individual
farms
0.0
0.0
0.0
0.0
20.1
10.8
1.2
8.1
97.8
78.9
1.6
17.3
Kaliningrad Region
136.3
124.2
1.9
10.2
Leningrad Region
194.3
181.1
3.3
9.9
Murmansk Region
45.3
42.0
1.9
1.4
Novgorod Region
125.5
111.0
2.1
12.4
79.0
66.2
1.2
11.7
1946.7
972.8
74.9
898.9
Republic of Adygea
53.9
39.5
1.6
12.8
17.4
0.2
3.3
13.9
864.0
614.8
34.8
214.4
Astrakhan Region
7.2
2.4
1.6
3.2
Volgograd Region
495.2
127.8
9.8
357.6
Rostov Region
509.0
188.0
23.9
297.0
North Caucasian
Federal District
418.3
204.8
8.3
205.2
1.1
0.2
0.3
0.7
56.5
47.1
0.3
9.1
18.7
13.5
2.6
2.6
28.4
7.8
0.5
20.0
Chechen Republic
Stavropol Territory
313.7
136.3
4.6
172.8
Including Nenets
Autonomous Area
Arkhangelsk Region
(excl. Nenets
Autonomous Area)
Vologda Region
Pskov Region
Southern Federal
District
Krasnodar Territory
Republic of Dagestan
Republic of Ingushetia
Kabardino-Balkar
Republic
Karachaevo-Cherkessia
Republic
Republic of North
Ossetia-Alania
126
All types of
farms
Ag enterprise
Household
farms
Individual
farms
3714.9
2166.5
189.1
1359.3
Republic of
Bashkortostan
309.5
160.3
25.1
124.0
Republic of Mari El
179.9
167.8
1.2
10.9
Republic of Mordovia
311.0
161.8
5.5
143.7
Republic of Tatarstan
622.9
496.7
30.5
95.7
Udmurt Republic
295.8
252.1
3.8
39.9
Chuvash Republic
211.4
122.9
9.4
79.1
Perm Territory
206.3
157.4
7.4
41.4
Kirov Region
181.7
157.7
1.7
22.3
Nizhny Novgorod
Region
143.2
72.8
5.4
65.0
Orenburg Region
260.8
112.1
27.3
121.4
Penza Region
290.9
94.3
22.2
174.4
Samara Region
209.5
111.9
11.5
86.1
Saratov Region
346.6
30.9
33.7
282.0
Ulyanovsk Region
145.3
67.7
4.3
73.4
1162.2
730.4
69.8
361.9
Kurgan Region
130.5
28.3
16.2
86.0
Sverdlovsk Region
270.8
237.8
8.8
24.2
Tyumen Region
374.4
175.6
34.3
164.6
40.5
7.2
29.9
3.3
2.3
1.3
0.9
0.1
331.7
167.0
3.5
161.1
386.4
288.7
10.6
87.1
Volga Federal District
Ural Federal District

Area-Yugra
Yamalo-Nenets
Autonomous Area
Tyumen Region
(excl. Khanty-Mansy
Autonomous AreaChelyabinsk Region
127
All types of
farms
Ag enterprise
Household
farms
Individual
farms
3050.6
1386.6
151.8
1512.2
Republic of Altai
11.3
0.1
0.9
10.3
74.7
35.0
7.1
32.6
Republic of Tyva
26.2
1.5
1.2
23.6
Republic of Khakassia
60.7
2.1
9.3
49.4
Altai Territory
569.6
96.8
13.7
459.1
121.0
12.0
14.0
95.0
Krasnoyarsk Region
447.7
177.3
15.4
255.0
Irkutsk Region
221.6
106.7
29.2
85.7
Kemerovo Region
417.6
284.1
16.2
117.4
Novosibirsk Region
373.7
178.3
17.3
178.1
Omsk Region
522.0
327.1
23.1
171.8
Tomsk Region
204.6
165.8
4.5
34.3
309.1
144.6
56.1
108.4
27.4
10.2
9.5
7.7
Kamchatka Territory
13.3
8.1
1.5
3.6
Primorsk Territory
91.6
51.4
12.4
27.8
62.7
42.2
8.1
12.4
Amur Region
74.0
18.6
11.8
43.5
Magadan Region
2.5
0.7
1.0
0.8
Sakhalin Region
17.4
11.3
1.3
4.8
19.9
1.8
10.5
7.6
0.3
0.3
0.0
0.0
Siberian Federal
District
Far Eastern Federal

District
Republic of Sakha
(Yakutia)
Jewish Autonomous
Region
Chukot Autonomous
Area
128
Cattle
Table 45: Number and structure of cattle inventories by region,
2010
All types of
farms
Ag enterprise
Household
farms
Individual
farms
20069.4
9155.2
1656.6
9257.6
Central Federal
District
2843.9
2023.3
116.6
703.9
Belgorod Region
235.3
157.6
13.8
63.9
Bryansk Region
212.7
162.7
15.2
34.8
Vladimir Region
145.2
133.6
2.3
9.3
Voronezh Region
386.2
223.0
15.3
148.0
Ivanovo Region
76.1
57.6
3.5
15.0
Kaluga Region
131.3
114.8
4.3
12.2
66.8
51.5
2.2
13.0
Kursk Region
199.5
111.6
9.8
78.0
Lipetsk Region
143.1
88.3
5.8
49.0
Moscow Region
260.2
243.0
3.5
13.7
Oryol Region
135.3
92.8
4.7
37.9
Ryazan Region
177.3
151.1
2.2
24.0
Smolensk Region
141.2
106.1
9.1
26.1
Tambov Region
143.9
29.3
12.2
102.4
Tver Region
157.5
117.3
7.5
32.8
Tula Region
100.9
73.1
3.1
24.7
Yaroslavl Region
131.2
109.9
2.0
19.2
Northwestern Federal
District
697.1
556.5
29.6
111.0
Republic of Karelia
25.7
19.4
1.1
5.1
Komi Republic
37.8
20.3
4.9
12.6
Arkhangelsk Region
54.3
36.3
6.7
11.3
Russian Federation
Kostroma Region
129
All types of
farms
Ag enterprise
Household
farms
Individual
farms
1.6
1.5
0.0
0.1
52.7
34.8
6.7
11.2
185.7
161.9
7.6
16.2
61.5
31.9
2.5
27.0
179.1
166.1
2.3
10.7
7.8
7.1
0.5
0.2
43.0
29.3
2.4
11.3
102.3
84.1
1.7
16.5
2447.2
736.0
456.1
1255.1
49.2
5.5
3.5
40.2
565.0
102.2
240.6
222.2
Krasnodar Territory
633.1
431.5
34.4
167.2
Astrakhan Region
262.8
15.6
79.5
167.6
Volgograd Region
339.3
51.0
38.8
249.5
Rostov Region
597.9
130.1
59.4
408.4
2205.6
328.4
225.3
1651.9
Republic of Dagestan
909.7
105.8
77.2
726.6
Republic of Ingushetia
55.8
1.4
11.1
43.2
265.1
41.5
39.6
184.0
235.8
36.4
40.0
159.3
138.9
20.1
8.7
110.1
Chechen Republic
221.4
7.8
22.6
190.9
Stavropol Territory
379.0
115.3
26.0
237.6
Including Nenets
Autonomous Area
Arkhangelsk Region
(excl. Nenets
Autonomous Area)
Vologda Region
Kaliningrad Region
Leningrad Region
Murmansk Region
Novgorod Region
Pskov Region
Southern Federal
District
Republic of Adygea
North Caucasian
Federal District
Kabardino-Balkar
Republic
Karachaevo-Cherkessia
Republic
Republic of North
Ossetia-Alania
130
All types of
farms
Ag enterprise
Household
farms
Individual
farms
Volga Federal District
6048.7
3116.0
375.1
2557.6
Republic of
Bashkortostan
1268.6
484.2
77.6
706.8
Republic of Mari El
100.1
50.6
1.5
48.0
Republic of Mordovia
298.9
196.7
15.0
87.3
Republic of Tatarstan
1092.4
722.6
78.9
290.9
Udmurt Republic
363.4
289.0
13.9
60.4
Chuvash Republic
224.6
67.2
6.9
150.4
Perm Territory
263.1
175.1
7.7
80.4
Kirov Region
259.9
222.3
4.0
33.5
Nizhny Novgorod
Region
315.5
234.1
18.6
62.8
Orenburg Region
655.4
318.1
39.6
297.7
Penza Region
287.7
106.9
14.0
166.8
Samara Region
212.8
89.0
21.8
102.0
Saratov Region
551.3
101.3
63.1
387.0
Ulyanovsk Region
155.0
58.9
12.7
83.5
1084.5
540.6
54.7
489.3
Kurgan Region
199.6
54.9
7.7
137.0
Sverdlovsk Region
255.6
183.3
16.5
55.8
Tyumen Region
268.5
139.4
16.3
112.8
11.8
3.3
5.0
3.5
1.0
0.9
0.0
0.1
255.6
135.2
11.3
109.2
360.8
163.0
14.2
183.7
Ural Federal District

Area-Yugra
Yamalo-Nenets
Autonomous Area
Tyumen Region
(excl. Khanty-Mansy
Autonomous AreaChelyabinsk Region
131
All types of
farms
Ag enterprise
Household
farms
Individual
farms
4281.5
1724.2
311.4
2245.9
Republic of Altai
204.0
29.4
56.2
118.3
399.7
57.4
48.9
293.3
Republic of Tyva
140.5
16.6
9.9
114.0
Republic of Khakassia
168.5
37.8
30.0
100.8
Altai Territory
902.1
462.8
34.9
404.4
456.2
58.5
45.6
352.0
Krasnoyarsk Region
438.0
238.7
4.0
195.3
Irkutsk Region
279.5
67.8
24.3
187.3
Kemerovo Region
207.4
91.6
14.7
101.1
Novosibirsk Region
548.0
385.7
11.2
151.1
Omsk Region
438.1
227.1
21.8
189.2
Tomsk Region
99.5
50.8
9.8
38.9
461.0
130.3
87.7
242.9
233.6
50.2
63.5
120.0
9.5
5.2
0.9
3.3
Primorsk Territory
59.5
18.3
7.1
34.1
27.0
16.4
1.0
9.6
Amur Region
95.1
27.8
6.3
61.0
Magadan Region
3.8
1.2
2.0
0.6
Sakhalin Region
17.9
9.5
2.3
6.1
14.5
1.8
4.5
8.2
0.0
0.0
0.0
0.0
Siberian Federal
District
Far Eastern Federal

District
Republic of Sakha
(Yakutia)
Kamchatka Territory
Jewish Autonomous
Region
Chukot Autonomous
Area
132
Annex 2 - Main breeds and crosses

Broilers
Russian poultry production largely uses cross-breed birds.
According to the Russian Poultry Union, the following are the
leading crosses in the Russian Federations broiler production:
R
oss 308 (40 percent)
H
ubbard (39 percent)
Smena 8 (13 percent)
Others (8 percent)
The genetic potential and performance of these Russian and foreign
broiler meat crosses is similar. One of the major reasons for this
similarity is that domestic crosses are selected based on imported
genetics, which have common breeding lines with western suppliers.
The most popular broiler crosses in the Russian Federation are as
follows:
Figure 61: The most popular broiler breeds
40%
Ross 308
8%
Hubbaurd
13%
Smena 8
Others
39%
Source: Russian Poultry Union.
Pigs
Owing to the absence of a nation-wide animal identification
system in the Russian Federation, pigs and cattle are only
registered and bonitated (tagged) by large commercial growers
133
and feedlot operations. About 15-20 percent of pig stocks in

commercial farms are registered. The same is true for dairy cattle.
In 2010, the Russian pig-breeding sector had 91.100 pigs of 16 breeds
and types that were raised in 66 genetic centers and 131 breeding
farms. These pigs make at least 6 percent of the total population of
sows in all categories of farms and meet the basic industry needs.
The numbers of bonitated sows of meat breeds in breeding farms
by breed are 11690heads of Landrace, 4409heads of Duroc,
5724heads of Yorkshire and -7651heads of Large White breed
(with imported genetics).
The leading role among pig breeds in the Russian Federation
is traditionally occupied by the large, white breed animals
(70.27percent), followed by Landrace (9.8 percent), Yorkshire
(4.32 percent), Duroc (3.36 percent), large white (with imported
genetics) (6.46 percent), middle white (MW-1) (2.87 percent)
and the remaining species hold 2.92 percent. The lowest shares
of breed structure belongs to Livny (0.28 percent), large black
(0.43percent), Urzhum (0.3 percent) and Breit (0.19 percent).
The most popular pig breeds can be seen in Figure 62.
Figure 62: The most popular pig breeds
70.3%
Large white
Land race
Yorkshire
4.3%
Others
15.6%
9.8%
Source: Agricultural Consulting Center and SibAgro.
In recent years, key performance indicators of sows, including firstlitter sows, of all breeds and types of farms were as follows:

134
litter: 10.8heads;
preweaning number of piglets in 30 days: 9.9heads;
preweaning litter weight in 30 days: 76.8 kg;
one pig weight in 30 days: 7.8 kg, which is comparable with the
international Grade A level.
The reproductive capacity of sows in breeder farms is:

l itter: 11.2-11.1heads;
p
reweaning number of piglets in 30 days: 10.1-10.0heads;
preweaning litter weight in 30 days: 81-80, 4 kg;
one pig weight in 30 days: 8.0-7.8 kg.
In terms of reproductive qualities, the main domestic parent
pig breed large white is almost as good as the worlds best
breeds (Landrace, Yorkshire). However, when looking at fattening
and meat quality, the large white breed of domestic breeding has
lower performance than foreign analogues. In addition, the genetic
features of domestic and imported pig breeds are not fully realized
mainly because of organizational, technological, feeding and price
factors, not because of the breed itself.
Cattle
In 2010, about 3.5million heads of dairy, dairy-meat and meat cattle
were bonitated in the Russian Federation. Cattle herds consist
of 19 species and 24 types; the black-and-white breed occupies
the dominant position (over 2million heads or 57.92 percent) and
is mostly used for dairy. The second place is taken by Simmental
(332.3thousand heads or 9.58 percent), and the third place belongs
to the Kholmogory breed (303.8thousand heads or 8.76 percent).
A total of 319thousand heads of meat cattle, including
148.1thousand cows of 14 breeds and types were bonitated in 50
Russian Federation regions.
The three breeds of cattle listed above represent about 85 percent
of the farmed beef cattle in the Russian Federation. Galloway, Grey
Ukrainian, Charolais and Salers breeds are not very popular, giving a
higher place to Hereford and Kazakh white breeds. The population of
Kalmyk breed cows is also declining (see Table 46 and 47).
Figure 63 and 64 illustrate the breed structure of dairy and beef
cattle in the Russian Federation.
A significant increase in European breeds was registered in 20082010:
L
imousine: up 56.0 percent
A
berdeen-Angus: up 26.3 percent
Simmental: up 37.4 percent
135
Figure 63: The most popular cattle breeds for dairy and meat
57.9%
Black and white

Simmental
Kholmogory
9.6%
Others
23,7%
8.8%
Source: Molochnoe i myasnoe skotovodstvo (Meat and Dairy Cattle Breeding Magazine).
Figure 64: The most popular cattle breeds for meat

44,4%
Kalmyk
Hereford
Kazakh white
15%
Others
22,8%
17.8%
Source: VNIIMS RASHN.
At present, 49 genetic centers and 199 breeding farms carry out

the improvement of breeding and productive qualities of beef
cattle. Large international genetic companies, such as International
Genetics Ltd, or Genesus Genetic, have representatives in the
Russian Federation.
Progress has been made recently in beef cattle breeding. Many
years of work have resulted in a reproductive cross-breed of Kalmyk
and Aberdeen-Angus breeds (this project was carried out by the
All-Russia Scientific Research Institute Of Meat Cattle Breeding, in
the Volgograd Region). This new beef cattle breed is called Russian
hornless. It has higher productivity and is well adapted to the steppe
zone (a feature common in Kalmyk cattle), and it has the excellent
beef qualities inherent to the Aberdeen Angus breed (filamentary,
marbled meat). The breed was officially registered in 2007.
136
Table 46: Relative number of heads of cattle, dairy and dairy/

meat breeds, percent, 2009-2010
Breed
Total
Incl. cow
2009
2010
2010/09
2009
2010
2010/09
100
100
100
100
56.93
57.92
0.99
56.74
57.27
0.53
Irmensky
0.09
0.09
0.1
0.11
0.01
Leningradsky
0.16
0.14
-0.02
0.18
0.17
-0.01
0.08
0.07
Uralsky
0.06
0.09
0.03
0.06
0.09
0.04
Barybinsky
0.16
0.15
-0.01
0.16
0.15
-0.01
Samarsky
0.04
0.03
-0.02
0.05
0.03
-0.02
Krasniyarsky
0.14
0.14
0.15
0.15
Petrovsky
0.04
0.05
0.05
0.05
Vologodsky
0.27
0.25
-0.02
0.22
0.22
Priobsky
0.24
0.27
0.03
0.23
0.27
Netsepinsky
0.06
0.06
0.05
0.05
0.04
Simmental
9.78
9.58
--0.2
9.41
9.36
Nikolaevsky
0.09
0.09
-0.05
Kholmogory
8.76
0.24
9.04
8.65
Tatarstansky
4.29
4.53
0.24
4.09
4.05
-0.39
Pechyosky
0.16
0.18
0.02
0.19
0.21
-0.04
Krasno-Pyeostraya
5.25
5.51
0.26
5.13
5.42
0.02
Voronezhsky
0.27
0.26
-0.01
0.24
0.24
0.29
Yeniseysky
0.42
0.42
0.46
0.48
0.01
Karskaya Stepnaya
4.77
4.54
-0.23
4.93
4.74
0.02
Total in
Russian Federation
Black-and-white types:
Moscovsky
137
Total
Breed
Incl. cow
2009
2010
2010/09
2009
2010
2010/09
Kubansky
0.05
0.04
0.04
0.04
Kuliundinsky
0.63
0.69
0.06
0.64
0.69
0.05
Sibirsky
0.33
0.36
0.03
0.34
0.34
Holstin Black and White
4.26
4.64
0.38
4.5
5.2
0.7
Aishirsky
2.92
2.8
-0.12
3.23
3.1
-0.13
Novopadozhsky
0.05
0.05
0.05
0.05
0.03
-0.12
0.03
Yaroslavsky
2.45
2.33
2.4
2.29
-0.11
Mikhailovsky
0.05
0.04
-0.01
0.04
0.04
Buraya Shvitskaya
1.71
1.59
-0.12
1.77
1.68
-0.09
Smolenskay
0.09
0.11
0.02
0.08
0.11
0.03
Bestuzhevskaya
1.01
0.96
-0.05
0.88
0.86
-0.02
Sychevskaya
0.65
0.58
-0.07
0.67
0.6
-0.07
0.02
0.03
Kostromskaya
0.51
0.47
-0.04
0.52
0.48
-0.04
Holstin Red and White
0.43
0.01
-0.42
0.42
-0.42
0.1
0.08
-0.02
0.1
0.07
-0.03
Red Gorbatovskaya
0.06
0.06
0.07
0.07
Istrobenskaya
0.02
0.02
0.03
0.02
-0.01
Suksunskaya
0.06
0.06
0.08
0.07
-0.01
Jerseyskaya
0.05
0.04
-0.01
0.05
0.04
-0.01
0.003
0.003
0.005
0.005
Smena
Vazuzsky
Red Estonskaya
Tagilskaya
Source: Molochnoe i myasnoe skotovodstvo (Meat and Dairy Cattle

Breeding Magazine).
138
Table 47: Number of heads of bonitated meat cattle, 2008-2010

2008
Breed
Number of
heads
2009
Share, Number
percent of heads
2010
Share, Number
percent of heads
Share,
percent
All breeds
260932
100
304588
100
319012
100
Kalmyk
121670
46.63
138607
45.51
141570
44.38
Hereford
61564
23.59
67630
22.2
72709
22.79
Incl. Hereford
Ural type
4750
1.49
Kazakh white
5057
17. 90
55990
18.38
56743
17.79
AberdeenAngus
5657
4.55
18257
5.99
19941
6.25
Charolais
2193
1.94
6401
2.1
6812
2.14
Simmental beef
total
2834
2.17
6771
2.22
8751
2.74
Incl. Bredin
type
2218
0.84
4113
1.35
6339
1.99
Limousine
1172
1.09
4645
1.53
5433
1.7
Aubrac
1093
0.85
2555
0.84
2963
0.93
Galloway
987
0.45
1577
0.52
1698
0.53
Salers
92
0.42
1207
0.4
1392
0.44
Russian
hornless
0.38
849
0.28
925
0.29
Ukraine grey
0.04
99
0.03
75
0.02
Source: VNIIMS RASHN.
139
Annex 3 - Meat production technologies

Table 48: Production technologies used for poultry meat
production
Item
Technology
Large modern
operations
(>50000 tonnes/y)
Production
processes
organization
Large modern
operations
(>50000 tonnes/y)
Medium and small
farms of new type
(30000-50000
tonnes/y)
Small and medium

farms of old type
Annual capacity less
than 30000 tonnes
140
Description
Vertically integrated operations, which include
own feed production, hatching, breeding and
grow-out operations, processing, rendering
and marketing;
use modern technologies and equipment;
high degree of automation;
implement food safety measures;
use local and foreign consultants;
have support from local and federal
governments;
comprise operations in various regions;
integrated with pig production in many cases;
assure quality control.
Vertically integrated in most case;

use modern technologies and equipment;
observe biosecurity measures;
use local and foreign consultants;
very often have a high degree of automation;
assure quality control.
Use old equipment and technologies;

have weak food safety control;
do not invest in staff and its training;
have problems with financing;
usually have state shares in equity;
produce too many different products;
cannot handle costs due to lack of
knowledge.
Item
Technology
Description
Floor housing: birds

are raised on the
floor covered with
wood shavings or
straw
Strong food safety control;

higher quality due to less damage to birds;
better welfare;
easier to handle and manage flocks;
low maintenance equipment;
better ventilation and lighting;
additional cost of shavings or straw to collect
litter.
Broiler housing
technology
Cage housing: birds
are raised in cages
built on several levels
Grow-out
(rearing) technology
planning
All-in all-out: houses

are built by zones
for complete zone
cleaning
Best for disease prevention;

allow better flock management and
performance;
provide savings on livability and yield;
require additional investment in housing.
Continuous cycle: no
free time between
houses cleaning in
zones
No need for additional capital construction;

prevent full cleaning of production areas;
cause disease retransmission;
affect flock performance.
Old technology:
Feed mash crushed
grains
Low cost of equipment and of production

process;
high losses of feed;
low feed conversion.
New technology:
pelleted heat-treated
combined feeds
Capacity to produce several feed recipes;

good feed conversion;
minimal waste of feed throughout production
chain;
consistently ensured quality, higher food
safety.
Feed type / feed

plant
Local genetics
(both Russian and
Western breeds)
5
Higher yields per square meter;

higher food safety risks;
intensive labour and technology;
high maintenance of climate control;
higher rates of damaged birds.
Good local availability;

high maintenance;
inconsistent performance;
tainted with various diseases.
Genetics
Foreign genetics
(supplied from
abroad)
Most productive breeds from best genetic

centers;
have good service from breed suppliers;
risk of non-delivery for various reasons;
higher hatchability and fertility;
require complicated vaccination programmes.
141
Item
Technology
Prime processing
(slaughter and
evisceration)
6
High cost savings on labour, packaging,

energy, equipment, infrastructure and
marketing;
no added value.
Processing
Full processing
(including cut-up,
further processing
and packaging)
Description
Added value on basic product;

higher yield;
wide product range;
better marketing prospects;
additional expenses on equipment and staff;
higher technological risks.
Water chilling: birds

are immersed in
huge tanks filled
with ice water
Higher yields because of retained water;

better product appearance;
shorter chill time;
retained water leaks in packaging;
higher risk of cross contamination;
excessive waste of water.
Air/combined: birds
are passed through
a chilling hall with
com-pressed cold air
No leaks in packaging;
no cross contamination;
higher energy consumption;
longer chill time;
risk of improper anti-microbial treatment.
Composting outside
the farm and further
use as a fertilizer
Minimal cost involved;

potential benefits from fertilizer sales or use;
require big lots of land;
high ecological risk.
Chilling
Litter utilization
Processing for
biofuels, burning,
etc.
Capital consuming (expensive);

resolve ecological issues;
guaranteed long-term sustainability.
Source: Authors compilation based on various sources.
142
Table 49: Production technologies used for pig meat

production
Item
Technology
Description
Irrational use of buildings and structures,

lack of their specialization;
unevenness of production;
in most cases, single-phase production
technology and seasonal tour farrowing
system;
Small farms of old
animals are walked out;
type
predominance of manual labour;
absence of backup facilities and inability
of holding repair works, which wear out
equipment and engineering systems;
mechanization of production processes
lead to high production cost per animal.
Farms are based on modern concepts and
designs;
Production processes
organization
depending on capacity, herds are placed

and transferred every 14 or 21 days,
Small farms of new
which doesnt allow effective utilization
type
of facilities, it leads to downtime of
technological areas;
low biosecurity: house operators often
maintain 2-3 areas, contaminating them
with pathogens.
All buildings specialized by production
purposes;
continuous live production process of
homogeneous groups of animals;
two- or three-phase technology of
production (farrowing/nursing/grow
Modern production
feeding);
facilities
animals kept in-house;
high degree of automation and
mechanization of production processes;
lower production costs and capital
investments per head;
high level of biosecurity.
143
Item
Technology
Technology of
keeping pigs
Floor in pig house is covered with straw or

wood shavings (litter) to absorb manure;
Nesting need for large amounts of litter, but this
gives good compost;
technology
high costs of labour;
no resource-saving equipment.
Nesting
technology
Slotted floor
technology
Old technology
3
Technology of manure
removal from houses
with slotted floor
Modern technology
144
Feeding technology
and diets
Description
Reduces cost of cleaning by 10-15 times;

stringent requirements for the
microclimate (temperature, humidity, air
velocity, etc.);
need to build dump yards based on
12-month exposure of manure in each of
the lagoons;
high level of process automation, energy
use and conservation equipment.
Use of water wash for dung removal,
which leads to the formation of a large
amount of manure runoff.
General use of waterless methods of

manure removal to ensure the reduction
of water consumption for technological
purposes by 1.5-2 times*.
Feeding waste food product, vegetables,

potatoes;
high degree of manual labour;
loss of feed due to souring;
Old technology
impossibility of accurately delivering feed
to animals;
requires feeding center, steaming plant
and additional equipment and staff.
Pigs at various ages fed with specialized
pelleted feeds;
reduces the chance of poisoning with
mycotoxins;
Modern technology reduces waste of feed;
saves labour;
significantly increases the weight gain due
to higher conversion, nutrition value and
optimal balance of diets.
Item
Technology
Feeding type
Description
Cheaper equipment and easier

maintenance;
more hygienic;
less stress for animals during feed
Dry feeding
delivery;
requires clean water in the water troughs;
pigs manure becomes drier with no
noxious odors.
Easier and more perfect equipment;
more reliable and durable because of no
rotating parts or belts;
reduces water consumption and the
Wet feeding
volume of manure;
rational use of food, water and medicines:
vaccination and treatment of pigs is
simple and accurate.
Natural insemination
6
Requires more hogs, bigger production

areas and more feed and labour;
increased production costs.
Insemination type
Effective and quick;
increases productivity;
improves quality;
Artificial insemination
reduced costs;
maximum use of breeding potential of
hogs and sows.
145
Item
Technology
Description
Russian genetics, evaluation methods

and selection of animals are completely
outdated;
meat quality does not meet the
processors requirements because of high
Russian genetics
fat percentage;
costly and ineffective because many
Russian breeders are forced to have their
own herd of pedigree pigs for internal
hybridization.
7
Genetics
Modern high
productive foreign
genetics (Denmark,
Great Britain,
Canada, USA,
Germany)
Reduces (i) the volume of capital

investments, particularly in construction
and equipment, (ii) operating costs, (iii)
energy and water consumption, (iv) feed
costs, (v) use of veterinary preparations
and (vi) cost of manure disposal;
provide higher quality of end products;
reduce environmental impact;
increase overall economic efficiency of live
production operations.

* Now the water flushing technology is being improved: manure effluents are
separated, the liquid part is disinfected down to processed water and reused.
However, the problem of high humidity remains unresolved, together with
ventilation difficulty (especially in winter) and high-energy costs. Mechanical
harvesting adds increased labour costs.
146
Table 50: General technologies of cattle meat production

Item
Technology
Description
Cattle meat by
culling dairy cattle
Meat is obtained from culled dairy cows and calves. It

is much more costly to grow bull calves than to
dispose of them at early ages.
Specialized beef
farming
The animals of meat breeds gain weight faster than

dairy cattle. Beef from meat cattle breeds is tastier
and has higher yield. Such animals require much
less energy than dairy cattle. Disadvantages: monoproductivity and relatively low return on investments.
Stall-barn system
Year-round stall-barn housing extensively uses silage,

hay and straw in winter-time, and green chop of green
forage chain with concentrates in summer time. It is
recommended for farms with minimum grazing areas;
therefore, it is more expensive because it requires lots
of prepared fodder.
Pen system
Stall-barn system in winter, pens in summer (feeding

green chop of green forage chain and silage). This
system is used when grazing is not far from land with
plentiful grass (e.g. wet meadows along rivers) and if
grazing areas are not sufficient or remote.
Grazing-stall system
In the stall period animals are kept in barns and in the

pasture period, in artificial or natural pastures.
Grazing system
Preferable for farms that have large areas of natural and

improved pastures. Keeping cattle in the wild pastures
for 24 hours a day is the most efficient way to avoid
animal stress.
Traditional farmanimal method
This is a traditional method for dairy cattle rearing. Its

advantage compared with free-stall housing is that
individual maintenance of cows provides milk and
extends the productive life of the animals. It is used for
finishing growing in dairy farms, and there is a high
cost of manual labour.
Free-stall method
Compared with traditional housing, this method can

significantly reduce labour costs and efficiently use
production equipment. This technology is used by
some dairy farms, and takes the leading place in
meat production. It requires a lot of bedding or big
investments in slotted floors.
General
principles
Housing
system
Housing
method
147
Item
Grazing
technology
Technology
Description
Natural grazing
The main advantage of natural grazing is the low cost

of feed.
Artificial grazing
Artificial grazing is the use of annual and perennial

grasses, clover, etc. These pastures provide forage
in early spring, grow rapidly and are more resistant
to trampling. Artificial grazing has a positive effect on
weight gain, but it is more expensive.
Animal feed use
Winter diet of beef cattle generally includes slightly

dried, low-moisture silage with combined feed.
Change of animal
feed for flattened
grains and grain
forage
Conditioning is the most efficient way of processing

wet grain to feed, which provides high-quality forage.
The technology is effective because it allows cheaper
feed grain forage by eliminating the cost of drying
food and better digestibility.
Artificial
insemination
This method is modern and inexpensive (no need for

bulls or additional labour), has a higher guaranteed
result when compared with mating and means that
calving occurs uniformly throughout the year. Embryo
implantation is even more productive as it allows
control of the proportion of bulls and cows.
Natural insemination
Natural insemination is less effective and controllable.

It requires keeping breeding bulls, additional space,
feed, labour and other expenses.
Dairy cattle
Ayshirsky, Holstein, Yaroslavl, Taghil and other low

meat quality breeds.
Meat and dairy

cattle
Simmental, Bestuzhev, Kostroma, Shvitsky and other

breeds. Meat quality is satisfactory.
Special meat cattle

breeds
Aberdeen-Angus, Hereford, Limousine, Charolais,

Kazakh Whitehead and other breeds. Meat quality
is high.
Feeding
Insemination
Genetics
148
Annex 4 - Applicable state standards in

the Russian Federation
Feed
Table 51: Applicable state standards for feed
Designation
Title
GOST R 54954-2012
Feeds. Feeds and fodder additives for domestic

animals. Terms and definitions.
GOST R 52254-2004
Mixed feeds for fodder cattle. Index nomenclature.
GOST R 52255-2004
Mixed feeds for pigs. Index nomenclature.
GOST R 51899-2002
Granulated mixed feeds. General specifications.
GOST R 51851-2001
Mixed feeds for poultry. Index nomenclature.
GOST 18691-88
Artificially dried grass feeds. Specifications.
GOST 23513-79
Feeds in cakes pellets. Specifications.
GOST 18221-99
Mixed full-ration feeds for poultry. Specifications.
GOST R 51550-2000
Mixed feeds-concentrates for pigs. General

specifications.
GOST 9268-90
Mixed feeds-concentrates for fodder cattle.

Specifications.
GOST R 51166-98
Mixed feeds for fur-bearing animals, rabbits and

nutrias. Specifications.
149
Meat
Table 52: Applicable state standards for meat
Designation
GOST R 50848-96
Title
Cattle. The criteria for raising and feeding young livestock for
the production of meat foodstuffs for children. Requirements.
Standard technological process.
GOST R 52702-2006
Chicken meat (carcasses of chickens, broiler chickens and their

parts). Specifications.
GOST R 52703-2006
Chicken meat. Trade descriptions.
GOST R 54366-2011
Chilled meat by-products blocks. Specifications.
GOST 31639-2012
Cooked sausage items of poultry meat. General specifications.
GOST R 53516-2009
Cooked sausage items of poultry meat. General specifications.
GOST 4025-95
Domestic meat mincers. Specifications.
GOST R 54357-2011
Duck meat (carcasses and their parts). Trade descriptions.
GOST R 54376-2011
Duck meat (carcasses and their parts). Specifications.
GOST 12.2.135-95
Equipment for processing meat and poultry farming products.

Safety requirements: precautions, sanitation and ecology.
GOST R 53476-2009
Food processing machinery. Cutting machines for meat.

Specifications.
GOST R 53848-2010
Frozen cooked mussel meat. Specifications.
GOST R 52674-2006
Frozen in blocks meat and meat by-products for production of

babies nutritional foods. Specifications.
GOST R 54704-2011
Frozen meat blocks. General specifications.
GOST 4814-57
GOST R 54675-2011
Frozen meat in blocks. Specifications.

Geese meat (carcasses and their parts). Specifications.
GOST 23126-78
Horses for meat for export. Specifications.
GOST 30146-95
Machines and equipment for the production of sausage products

and meat semi-finished products. General specifications.
GOST 28107-89
Machines for mixing minced meat. Main parameters, technical

requirements and test methods.
GOST 31799-2012
Meat and meat by-products, frozen in blocks, for production of

childrens nutritional foods. Technical specifications.
GOST R 52704-2006
Meat and vegetable preserves from poultry meat for

babiesnutrition. Specifications.
GOST R 52479-2005
Meat cooked sausage products for childrens food. General

specifications.
150
Designation
GOST R 52427-2005
GOST 28532-90
GOST 31490-2012
Title
Meat industry. Food products. Terms and definitions.

Meat mincers. General specifications.
Meat poultry mechanical separation. Specifications.
GOST R 52601-2006
Meat. Dressing of beef into cuts. Specifications.
GOST R 54367-2011
Meat. Dressing of lamb and goat into cuts. Specifications.
GOST 31778-2012
GOST 10.76-74
Meat. Dressing of pork into cuts. Specifications.

Meat. Horse flesh for export. Technical requirements.
GOST R 54048-2010
Meat. Pork for childrens nutrition. Specifications.
GOST R 52418-2005
Mechanically separated chicken meat for childrens food.

Specifications.
GOST 3739-89
GOST 21784-76
Packed meat. Specifications.

Poultry meat (carcasses of hens, ducks, geese, turkeys, guineafowls). Technical requirements.
GOST R 52306-2005
Poultry meat (carcasses of chickens, broiler-chickens and their

cut parts) for childrens nutrition. Specifications.
GOST R 54356-2011
Poultry meat and by-products of semi-prepared foods.

Acceptance regulations.
GOST R 54349-2011
Poultry meat and by-products. Acceptance regulations.
GOST R 53163-2008
Poultry meat of mechanical separation. Specifications.
GOST 28693-90
Production equipment for meat and poultry processing industry.

Sanitary requirements.
GOST 18158-72
Production of meat products. Terms and definitions.
GOST R 52428-2005
Products of the meat industry. Classification.
GOST R 54673-2011
Quail meat (carcasses). Specifications.
GOST R 54673-2011
Quail meat (carcasses). Specifications.
GOST 27747-88
GOST R 54672-2011
Rabbit meat. Specifications.

Raw-smoked and raw-jerked sausage products from poultry
meat. General specifications.
151
Designation
Title
GOST R 52818-2007
Sausage cooked goods from poultry meat for childrens nutrition.

General specifications.
GOST R 52986-2008
Meat. Dressing of pork into cuts. Specification.
GOST R 54520-2011
Meat. Dressing of veal into cuts. Specifications.
GOST 27095-86
GOST 9792-73
GOST R 54754-2011
GOST R 51187-98
Meat. Horse meat and young horse meat in half-carcasses

and quarters. Specifications.
Sausage products and products of pork, mutton, beef and meat
of other kinds of slaughter animals and poultry. Acceptance rules
and sampling method.
Semi-prepared boneless meat products in pieces for childrens
nutrition. Specifications.
Semi-prepared ground meat products, stuffed dumplings,
comminuted meat for childrens nutrition. General specifications.
GOST R 52675-2006
Semi-prepared meat and meat-contained products. General

specification.
GOST 31465-2012
Semi-prepared poultry meat for childrens nutrition. General

specifications.
GOST R 53517-2009
Semi-prepared poultry meat for childrens nutrition. General

specifications.
GOST R 53008-2008
Semi-prepared poultry meat and poultry offal. General

specifications.
GOST R 53588-2009
Semi-smoked meat sausages. Specifications.
GOST R 53852-2010
Semi-smoked sausages of poultry meat. General specifications.
GOST 29123-91
Symbols of controls of equipment for meat and bird processing

industries. Designations.
GOST 28534-90
Tracks for meat industry. Main parameters, dimensions and

specifications.
GOST 31472-2012
Turkey meat (carcasses and parts). Trade description.
GOST R 53670-2009
Turkey meat (carcasses and their parts). General specifications.
GOST 31472-2012
GOST R 53670-2009
Turkey meat for childrens nutrition. Specifications.
GOST R 53458-2009
GOST R 52820-2007
Turkey meat for childrens nutrition. Specifications.
152
Annex 5 - Profitability of poultry,

pork, and beef production in various
administrative subjects of the Russian
Federation
Tables 53, 54 and 55 show the profitability of poultry, pork and
beef production, including processing, in agricultural organizations
in the administrative subjects of the Russian Federation (without
state subsidies) in 2010.
Poultry
Table 53: Profitability of poultry in the administrative subjects
of the Russian Federation, 2010
Profitability
(loss),
percent
Profitability
Number of
subjects
Administrative unit
55
Up to 10
27
Bashkotostan, Udmurtskaja,
Kabardino-Balkanskaja, Kabardevo-Cherkesskaja, Karelija, Marij El,
Mordovia,Hakasija,
Chuvashkaja, Zabajkalsky, Krasnodarsky, Krasnoyarsky, Stavropolsky,
Habarovsky, Belhorodskaya, Volgogradskaya, Belgorod, Volgograd,
Kemerovo, Murmansk, Novgorod, Novgorod, Orenburg, Orel, Samara,
Sverdlovsk, Tula, Ulyanovsk, Chelyabinsk
10-1-20
17
Adygea, Altai, Perm, Primorsky, Bryansk, Vladimir, Vologda, Voronezh,

Irkutsk, Kaliningrad, Kaluga, Leningrad, Novosibirsk, Rostov, Ryazan,
Tyumen, Yaroslavl
Over 20
11
Komi, Tatarstan,Amur, Kurgan, Kursk, Lipetsk, Moscow, Omsk, Penza,

Tver, Tomsk
Loss
21
Up to 10
Dagestan, Sakha (Yakutia), the Chechen

Arkhangelsk, Kostroma, Pskov, Saratov, Tambov
10.1-20
Kamchatka
Astrakhan, Kirov
Over 40
Buryatia,Smolensk,Khanty-Mansiysk, Chukotka
Saint Petersburg
153
Pork
Table 54: Profitability of pork in the administrative subjects of
the Russian Federation, 2010
Number
of
subjects
The subjects
Profitability
51
Up to 10
14
Buryatia, Kabardino-Balkaria, Karachay-Cherkessia, Chuvash

Kraj: Perm, Primorsky, Khabarovsk
Astrakhan, Voronezh, Ivanovo, Kostroma, Kurgan, Murmansk,
Ryazan
10.1-20
11
Adygea, Bashkortostan, Mordovia, Udmurtia

Altai, Kamchatka, Krasnoyarsk and Stavropol
Vologda, Kemerovo, Kursk
20.1-30
12
Bryansk, Kaluga, Kirov, Moscow, Novgorod, Novosibirsk,

Pskov, Sverdlovsk, Tverskaya. Tula, Tyumen
Evrejskaja
Over 30
14
Mari El, Tuva

Belgorod, Volgograd, Irkutsk, Kaliningrad, Leningrad, Lipetsk,
Orel, Omsk, Penza, Tambov, Tomsk, Chelyabinsk
Loss
26
Up to 20
16
Karelia, Komi, North Ossetia, Tatarstan, Khakassia

Transbaikalia, Krasnodar
Amur, Arkhangelsk, Vladimir, Nizhny Novgorod, Orenburg,
Rostov, Sakhalin, Ulyanovsk, Yaroslavl
20.1-40
Samara, Smolensk
Khanty-Mansiysk
Over 40
Altai, Dagestan, Kalmykia,Saratov

Chukotka, Yamal-Nenets
Saint Petersburg
Profitability (loss),
percent
154
Beef
Table 55: Profitability of beef in the administrative subjects of
the Russian Federation, 2010
Profitability (loss),
percent
Number of
subjects
The subjects
Kalmykia, Karachay-Cherkessia
Loss
78
Up to 20
14
Altai, Bashkortostan, Buryatia, Dagestan, Sakha (Yakutia),

Udmurt,Altai, Transbaikalia, Krasnoyarsk, Primorsky,Orel,
Kirov, Novosibirsk, Chelyabinsk
20.1-30
16
Kabardino-Balkaria, Mari El, Mordovia,

Tatarstan,,Chuvashia, Krasnodar, Perm
Volgograd, Voronezh, Irkutsk, Kurgan, Omsk, Orenburg,
Penza, Saratov, Ulyanovsk
27
North Ossetia-Alania, Tuva, Khakassia

Stavropol,Arkhangelsk, Astrakhan, Belgorod, Bryansk,
Vologda, Ivanovo, Kaluga, Kemerovo, Kostroma, Kursk,
Nizhny Novgorod, Novgorod, Pskov, Rostov, Ryazan,
Samara, Sverdlovsk, Smolensk, Tambov, Tver, Tomsk, Tula,
Tyumen
21
Adygea, Ingushetia, Karelia, Komi

Kamchatka, Khabarovsk, Amur, Vladimir, Kaliningrad,
Leningrad, Lipetsk, Magadan,
Moscow, Murmansk, Sakhalin, Yaroslavl
Khanty-Mansiysk, Chukotka, Yamal-Nenets
Evrejskaja
Saint Petersburg
Profitability
30.1-40
Over 40
155
Annex 6 - Leading meat brands

Company: JSC Prioskolye
Name: Prioskolye
Products: chicken carcass, semi-finished products of broiler meat, offal
and frozen products from poultry
Name: Picnic with Prioskolye
Products: semi-finished products of broiler chickens in marinades and
spices and sausages for frying
Name: Al Safa
Products: certified halal products permanently monitored by
representatives of the Council of Muftis of the Russian Federation
Name: Odnazhdy v derevne
Products: top quality chicken
Name: Odnazhdy v derevne
Products: high-quality, ecologically clean chicken meat and products
Company: GROUP CHERKIZOVO
Name: Petelinka
Products: chilled poultry carcasses and cuts; pork, beef and barbecue in
marinade
Name: Kurinoje Tzarstvo
Products: chilled and frozen poultry meat, pork and beef
Name: Mosselprom
Products: ecologically clean chilled and frozen poultry meat and
convenience food
Name: Vasiljevka
Products: chilled poultry in the mid-price segment
Name: Domashnaja Kurochka
Products: eco-products in the premium segment of chilled poultry
Company: BEZRK-Belgrankorm
Name: Yasnyje Zori
Products: leg with the bone and boneless, quarter, hip, thigh, breast,
wings, breast and sub-products
Name: Kurinnyj Korol
Products: original, new recipes of broiler meat
156
Company: Miratorg
Name: Miratorg
Products: chilled pork meat and semi-finished products
Company: GC Agro-Belogorye
Name: Daljnyje Dali
Products: fresh and semi-finished meat products
Name: Agro-Belogorye
Products: cuts chilled and frozen, vacuum packed
Company: OJSC OMPK
Name: Ostankino
Sub-brands: Slivochnyje, SOSISKA.RU
Products: cooked, smoked and semi-smoked sausages, ham, cutlets,
chilled meat, frozen meat and others
Company: Cherkizovsky
Name: Cherkizovsky
Company: Zarizino
Name: Zarizino
Company: Mikoyan
Name: Mikoyan
chilled meat, frozen meat, half-finished beef meat products and groundmeat
Company: Dimov
Name: Dimov
157
Annex 7 - Major agroholdings and meat

producers in the Russian Federation
Miratorg Agroholding
www.miratorg.ru
Agricultural and industrial holding Miratorg was founded in 1995 in
the Russian Federation as a trading company. In 2005 it became
the largest importer of meat. Since 2003, with the introduction of
quotas on meat imports, the company developed a new strategy
called from field to fork. Currently, Miratorg is the largest
producer of pork in the country.
With over 16000clients, Miratorg is present in 15 regions
and provides employment to more than 7000 people. Vertical
integration allows Miratorg to leverage costs and risks on various
commodity markets, maintain stable margins, minimize raw
materials price fluctuations and ensure timely supplies and quality
control at all production stages.
In 2012, the company opened a new processing plant in Kaliningrad,
Concordia, which would process poultry and other meats for
McDonalds and its own brands. Since 2009, Miratorg also ran
the brand of frozen vegetables named Four Seasons. In 2010, the
company started the construction of green-field broiler complex in
Bryansk Region with an annual capacity of 100000 tonnes.
As a result of restructuring in 2008-2010 into an agricultural and
industrial holding, Miratorg consolidated 100 percent shares of
its subsidiaries. At the end of 2012, the holding company planned
to consolidate LLC Concordia, LLC Prokhorovsky Feed Mill, LLC
Novoyakovlevsky and LLC Pristensky.
Miratorg is actively developing its own production of fodder and
grain to be able to fully meet the needs of its current and future
operations. Starting in May 2011, the combined capacity of two
feed plants reached 630000 tonnes a year. In 2012, a third feed
mill with an annual capacity of 360000 tonnes began to operate.
This mill is equipped with machinery from Brock (USA, elevator)
and Ottevanger (Netherlands, mill).
158
Production of pork is the core business of Miratorg. Today the

agroholding owns 12 automated pig farms working on Big
Dutchman (Germany) and Roxell (Belgium) equipment. Genetic
material is supplied by PIC (United Kingdom), Hermitage (Ireland)
and Dan Bred (Denmark). In terms of effectiveness, the holdings
pig farms are producing close to the worlds leading manufacturers
and are far ahead of the Russian average.
A slaughterhouse and a primary pork processing plant in Korocha
(Belgorod Region) were launched in 2008. It is the biggest and most
modern enterprise in the Russian Federation in this sector. The list
of equipment suppliers includes Banss and Multivac (Germany), York
(Denmark), Cryovac (the USA), Mondini (Italy) and Marel (Iceland). In
2011, this complex was approved for exports to the EU.
Food distribution is the final link in the business model of the
holding. In 2010 through its own retail chain, Miratorg sold 338
tonnes of meat, 64 percent of which was its own production.
Thanks to its distribution network, Miratorg markets 600-1000
tonnes of meat products daily.
In the first half of 2011, sales of Miratorg increased by 18.5 percent
when compared with the sales during the same period of the
previous year. Such growth is backed up by the active development
of the distribution network and an aggressive marketing policy.
Cherkizovo Group
www.cherkizovo-group.ru
Cherkizovo Group is a vertically integrated agribusiness company
with a full production cycle, from feed production to processing
meat products and distribution. The company was established
in 2005 as the result of merger between Agro-Industrial Holding
Cherkizovsky (involved in meat production and processing) and
Agro-Industrial Holding Mikhaylovsky (poultry production).
159
The companys activities comprise:

s even full-cycle poultry production facilities, with a total
capacity of 400000 tonnes live weight p.a.;
f ourteen modern pork production facilities with a total capacity
of 180000 tonnes live weight p.a.;
s ix meat processing plants with a total capacity of
190000tonnes p.a.;
six fodder plants with a total capacity of 1.4million tonnes p.a.;
g
rain storage facilities with a total storage capacity exceeding
500000 tonnes; and
a land bank exceeding 100000hectares.
In 2011, Cherkizovo:
a cquired 100 percent of Mosselprom, whose operations
include poultry, pork, feed production and grain businesses;
s tarted construction of the Elets agro-industrial complex
in the Lipetsk Region, with an annual meat capacity of
400000tonnes (poultry and pork) due in 2014;
r enovated the Otechestvenniy Product meat processing plant,
which increased its capacity to 400 tonnes per month;
o
pened a poultry breeding facility, Komarovka, at its Penza
cluster. The facility consists of 34 birdhouses, which have a
combined capacity of almost 1.1million broilers. And a second
line at the poultry breeding facility at its Bryansk cluster
consists of 26 birdhouses, which have a combined capacity of
almost 880000 broilers;
l aunched the largest hatchery in the Russian Federation at its
Penza cluster, capable of 105million eggs per year;
l aunched a large hatchery at its Bryansk cluster capable of
producing 43million eggs per year. After a second line is
160
launched, the total annual capacity of the hatchery will be

66million eggs;
s tarted production at its greenfield pork farms in Tambov,
Voronezh and Lipetsk by launching three breeding facilities;
o
pened a new poultry slaughter plant with an hourly capacity of
8000heads at its Penza cluster.
BEZRK - Belgrankorm
www.jasnzori.ru
Agroholding BEZRK-Belgrankorm was established in 1998 as
a feed mill factory. Over the past decade, the company has
expanded and diversified, and now has a strong focus on modern
equipment and innovative technologies.
Belgrankorms integrated poultry operations comprise four
hatcheries, 11 broiler-growing farms and three slaughterhouses
all overseen by a specialized poultry management department.
A closed production cycle delivers its products to the domestic
market, through the Yasnye Zori and Selskie traditsii brands.
Its main assets are concentrated in the Belgorod Region. For nine
months in 2010 BEZRK-Belgrankorm produced 132.9thousand
tonnes of poultry meat, 18.3thousand tonnes of pork,
16.7thousand tonnes of milk and 369 tonnes of feed.
The company sales reached RUR14.7 billion in first three quarters
of 2010.
The main shareholder is Alexander Orlov. Since spring 2008,
13.23percent of BEZRK-Belgrankorm is owned by the International
Finance Corporation.
Belaya Ptica CJSC

www.belaya-ptica.ru
CJSC Belaya Ptica is an active participant of the national project
Development of agriculture in which the company has already
invested RUR4429million. The holdings enterprises operate
along the full production chain. A closed-loop system and quality
control at every stage of production, from food processing to
distribution, ensures a consistently high quality product.
161
The holding operates in Belgorod Region. In 2010, it consisted

of 16 companies: a grain production company; a feed production
plant with a capacity of up to 240000 tonnes per year; three
eggs reproducers with a capacity of about 59million eggs per
year; a hatchery, which supplies 69million chicks per year; eight
poultry farms for raising broiler chickens, with a total production
of 100thousand tonnes per year of live poultry; and integrated
slaughtering and processing systems of poultry with a capacity of
10.5thousand heads per hour.
The companys turnover in 2010 amounted to RUR5.6 billion,
which is about 8 percent higher than the previous year. In 2010,
the production of animal feed increased to 210thousand tonnes
per year, hatching eggs to 57million units per year, day-old chick to
51million units a year, live poultry to 104thousand tonnes per year
and meat products to 82thousand tonnes per year. Investments
in production in 2009 amounted to RUR4429million. In 2010 no
investments were made.
In 2011, the production of animal feed increased to 224thousand
tonnes a year, hatching eggs to 59million units a year, day-old chick
to 53million animals a year, live poultry to 108thousand tonnes per
year and meat products to 88thousand tonnes per year.
SC Agro-Belogorye LLC
www.agrobel.ru
LLC SC Agro-Belogorye was established in July 2007. The group
is composed of 30 companies that include nine pig farms, which
have a capacity of 70thousand tonnes of pigs for slaughter in live
weight per year; six grain production companies; two animal feed
plants; an enterprise for the production of milk; some supporting
companies such as trading houses; and transport enterprises.
The holding operates in the Belgorod Region. In 2010 it had
revenues of RUR20.1 billion (according to Forbes). The group
employs about 5000 people. In 2010, it produced about
100000tonnes of live weight meat. In 2011, the group sold
105.6thousand tonnes of pigs for slaughter. Totals in 2011 were
5.5 percent higher than 2010. The total capacity of the groups feed
mills is of 282000 tonnes of feed per year.
162
Rusagro Group of Companies

www.rusagrogroup.ru
The Rusagro Group of Companies is an agricultural holding
working in two main areas: sugar and agriculture. The company
is positioned among the top three leaders of the Russian sugar
market. Rusagros first company was created in 1995. After 2000,
the company began developing new markets: grain, oilseed
and others. In November 2004, Rusagro decided to expand the
business and create large pig farms in the southeastern part of the
Belgorod Region.
Today Rusagro owns seven sugar plants in the Tambov and
Belgorod Regions; a fat plant in Yekaterinburg; a pig farm called
OAO Belgorod Bacon; grain elevators; eight regional sales
subsidiaries; and the management company. The company mainly
operates in the Moscow Region.
Production efficiency is achieved through the use of their own
feed supply. In 2010 income from pig meat sales was RUR4.57
billion. In 2009, the companies belonging to the group produced
900thousand tonnes of sugar, 33thousand tonnes of margarine,
53thousand tonnes of mayonnaise and more than 35thousand
tonnes of meat. The agroholding produces 13 percent of the sugar
in the Russian Federation (as per end of 2009).
Prioskolye CJSC
www.prioskol.ru
The company was founded in 2003. CJSC Prioskolye includes
poultry farms, processing and feed production plants and trading
houses. The revenues of the holding in 2009 amounted to RUR15.5
billion. In 2010 they were RUR18.9 billion (according to Forbes).
CJSC Prioskolye has 16 poultry farms with an overall capacity
of 300thousand tonnes of poultry meat in live weight per year
and eight poultry farms with a capacity of 12thousand tonnes
of poultry per year that are being introduced. At the end of 2010
Prioskolye had 25-27 percent of the chicken market in the Siberian
and Far Eastern Federal Districts. In the Novooskolsky area, the
company has a plant for the production of animal protein feed with
a capacity of 16thousand tonnes per year; it is the only one in the
Russian Federation capable of working in a continuous cycle. The
company also owns an industrial waste processing plant.
163
PRODO Group
www.prodo.ru
PRODO Group was founded in 2004. PRODO Management Ltd is
the management company of all the holdings enterprises. Another
company was created, PRODO commerce LLC, to interact with
suppliers, local distributors and retailers.
PRODO Group unites more than 20 manufacturing facilities located
throughout 11 regions of the Russian Federation. It employs
over 22000 people. The portfolio of PRODO Group includes
the brands Troyekurova, BonBekon, Daria, Rococo and Dobryj
Produkt. In 2010, the group produced 146.4thousand tonnes of
poultry meat in carcass weight, 77.4thousand tonnes of pork and
116.3thousand tonnes of processed meat.
AKGUP Promyshlennyj
The company was founded in November 1993 in Altayskij Kray and
is among the countrys largest commercial cattle producers. In 2008,
the company received the status of a breeding farm; it reproduces
Simmental breeds. In January 2010, the number of cattle on
the farm was more than 10thousand heads. In 2010, AKGUP
Promyshlennyj sold 5228 tonnes of meat, and the average weight
per head was 483 kg. Ninety-seven percent of its cattle were sold as
luxury quality. In 2010, the number of employees was 476 people.
Agrocomplex JSC
This company was founded in 1993. Today the company has more
than 30 structures, including ten farms, ten poultry farms, feed
mills, milling plant, shops, two oil-mills, two dairies and two meatprocessing plants. Powerful auxiliary structures include railway
craft, service station, biological laboratories and two elevators.
Associates of the company are located in Vyselkovsky, Pavlovsk,
Korenovskii, Ust-Labinsk, Slavic and Starominsky areas of
Krasnodar Krai, Krasnodar.
Today, Agricultural Complex is one of the most famous and
successful agricultural enterprises in southern Russia. The
company is involved in agriculture, animal husbandry and
processing of agricultural products. The company annually
produces about 4.5thousand tonnes of meat in live weight of
cattle. In 2012, the net income of the company amounted to
RUR1685178thousand.
164
AgroHolding Krasnyj Vostok

www.krvostok.ru
Agricultural holding Krasnyj Vostok was established in 2003 on the
basis of 68 agricultural enterprises in six districts of the Republic
of Tatarstan. The company is involved in the industrial production
of high-quality milk, breeding of highly productive cattle, crop
production and the processing and storage of grain.
During the last seven years the company invested RUR25billion
in its agricultural activity. The revenues in 2010 amounted
to RUR2203325thousand, and its net income was
RUR2624thousand. The company, according to the rating of
the Russian Academy of Agricultural Sciences, is recognized as a
leader of milk production in the Russian Federation. Today the total
population of breeding stock of the company is 88000 animals,
including 28000 milk cows. Every day, the company produces
350tonnes of milk. Each year, the company produces about
280000 tonnes of grains with an average yield of 43 centners per
ha. At the end of 2010, the company employed 1105 people.
OJSC Agrofirma Mtsensk

www.agrofm.narod.ru
OJSC Agrofirma Mtsensk was created in December 1998.
Mtsensk owns cattle-breeding complexes with 3600 cattle places.
The companys two main business directions are the production of
crops and livestock. The company also has machine, technological
and grain processing stations with a trading network.
At the beginning of 2011, the company had 4919heads of
cattle, including 455 dairy cows. In 2010, the sales of beef (in
live weight) amounted to 2878 tonnes. The average daily gain
of cattle was 1079g. In 2011, the total number of livestock
increased to 5147heads. The meat produced in live weight was
2.4thousand tonnes. Production of grains and legumes in 2010
was 40097tonnes with an average yield of 3.9 tonnes/ha.
Agricultural Company Belorechenskie

www.belor.ru
Belorechenskoe was founded in 1967. It was a small poultry farm
with an average annual population of 64thousand hens and
165
4910thousand eggs. The company has 139 employees.

Since 1967, the enterprise has undergone many structural and
institutional reforms. In February 1993, the company converted
to the agricultural joint stock company Belorechenskoe. Now it
produces eggs, egg powder and pasteurized eggs. The company
has breeding farms and hatcheries and is actively involved in crop
production (corn, potatoes, onions, carrots, beets, cabbages,
mushrooms, berries, forage crops, seedlings), livestock products
manufacturing (milk, cattle meat), dairy production and marketing
of sausages and meat products. Also, the company manages
waste with Californian worms, effectively uses environmentally
friendly fertilizers or vermicompost, and practices experimental
engineering.
Belorechenskoe has 2.4million birds and produces 545.4million
chicken eggs and 12million quail eggs yearly. The companys cattle
herd has 11300heads, including 5150 dairy cows that produce
28000 tonnes of milk and milk products. The company produces
3000 tonnes of meat products and sausages and 3.500 tonnes of
chicken and beef meat. In addition, the company produces
25000 tonnes of vegetables and potatoes.
OJSC Ostankino Meat Processing Plant (OMPK)

www.ompk.ru
OJSC OMPK is the leading manufacturer of processed meat and
convenience foods in central Russia. The company was founded in
1954. It owns 17 trading houses, 26 stores in Moscow and one of
the most modern pig farms in the country.
OJSC OMPK operates in Moscow and Regions of Central Russia
(Lipetsk, Voronezh, Ryazan, Belgorod, Yaroslavl, Nizhny Novgorod,
Smolensk, Tver, Ivanovo, Bryansk, Kursk). The companys
processing facilities can process 500 tonnes of products per day of
more than 100 varieties of processed meat. All production facilities
are equipped with the latest German and Austrian equipment.
At the end of 2011, Ostankino Meat Processing Plant had
maintained its leading position among the manufacturers
of sausage and meat products. Sales in 2011 amounted to
156000tonnes. In 2010 the company produced slightly less,
151000tonnes. The number of employees is 3310 people. In 2012
the company registered a net profit of RUR485036thousand.
166
ABI PRODUCT
www.abigroup.ru
The company was founded in 1995. ABI PRODUCT produces
about 280 kinds of sausages, deli meats, frozen foods and ready
meals. The companys portfolio includes the brands Starodvorskie
kolbasy, Zarechenskie kolbasy, Medvezhje Ushko, Blagolepnyje
and Tsaredvore. Products are manufactured in the following meat
processing plants (among some others): Starodvorskie has a
designed capacity of 175 tonnes per day; Pokom has a designed
capacity of 190 tonnes per day; and Mjasnaja galereja has a
designed capacity of 150 tonnes per day.
ABI PRODUCT sells its products through independent distributors
and retailers in 43 regions of Russian Federation. The company
also provides direct distribution of its products through its regional
logistics centers in Vladimir, Moscow, Kaliningrad, Krasnodar,
Ivanovo, Kostroma and Yaroslavl. ABI PRODUCT employs over
4000 people. In 2010, the company registered a net income of
RUR138898thousand.
JSC Mikoyan Meat Processing Plant

www.mikoyan.ru
Mikoyan Meat is the oldest meat processing enterprise in the
country. The company was mentioned for the first time in 1798.
In 1998, Mikoyan became part of the agricultural holding Exima.
The product range includes more than 700 names. The company
operates in Moscow and the Moscow Region, Saint Petersburg,
Rostov, Samara, Perm, Chelyabinsk and Novosibirsk. In 2010,
the share of the Mikoyan Meat Processing Plant in Moscow
and the Moscow Region was about 15 percent in real terms.
In 2010, JSC Mikoyan Meat Processing Plant produced around
79000 tonnes of meat production and registered a net profit of
RUR147518thousand.
167
Annex 8 - Recent investments in the

poultry sector
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project
at full
capacity
Industrial turkey complex

for 240000 tonnes of live
weight per year (stage 1:
90thousand tonnes). Stage
1includes hatchery and
processing facilities, feed
mill with grain storage and
manure disposal system.
LLC
Evrodon
Rostov
Region
800
2010
2012-13
Livestock production
systems for poultry meat
(poultry slaughter and
processing plant, hatchery,
feed, 128 breeders,
336 chicken houses,
rendering plant, residential
housing). Project capacity:
230thousand tonnes/year.
Complex start-up is planned
for 2013.
Cherkizovo
Group
Lipetsk
Region
600
2011
2019
Broiler complex in
Tatischevsk District of
Saratov Region (broiler
houses, hatchery, feed mill,
slaughter and processing
plant, cold store). Capacity:
31.5thousand tonnes/year.
RE-EM-FORM
s.r.o. (Czech
Republic)
Saratov
Region
357
2010
Broiler complex with

annual capacity of 100000
tonnes. The complex was
built on the premises of
Inzhavinskaya Poultry Farm
and will comprise broiler
houses in six rearing zones,
processing plant, grain
elevator, rendering plant,
cold stores.
CJSC
Izhavinskaya
Poultry Farm
(as a part of
Prioskole)
Tambov
Region
283
2010
2012

description
168

description
Implementing
company
(holding)
Region
Additional poultry farms

with capacity of 50000
tonnes of poultry per year.
5
Modernization of poultry
farms in the Argayashsky
Area to increase the volume
of poultry meat production
by 21 tonnes/year.
Investment,
million
USD
190
Uralbroiler
Group of
Companies
Starting
year
Project
at full
capacity
Chelyabinsk
Region
46.7
2010
Additional broiler housing

in Novgorod Region with
a total capacity of 22.500
tonnes/year.
Belgrankorm
Novgoro-d
Region
166
2010
Breeder operation of ten

houses brought the total
companys broiler meat
output to 80000 tonnes
in 2012.
LLC
LISKoBroiler
Voronezh
Region
150
2009
2015
Vertically integrated
turkey complex with an
annual capacity of 15000
tonnes/year, including
hatchery, breeders, rearing,
processing plant, packaging,
feed mill and grain storage.
The project is expandable
to 60000 tonnes of turkey
meat/year.
LLC Russian
Dairy
Company
(Rusmoloko)
Penza
Region
150
2011
2012
Broiler complex for 50000

tonnes of poultry/year.
Sitno
Company
Chelyabinsk
Region
140
2010
2011
10
Renovation and
construction of new poultry
farms in the Yetkulsk Area:
infrastructure, broiler
houses, feed mill.
LLC Bektysh
Chelyabinsk
Region
116.7
169

description
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project
at full
capacity
11
Construction of a new
poultry processing plants in
Blagodarny was scheduled
for August 2010. Plant
capacity is 80000 tonnes
per year.
CJSC
Stavropolsky
broiler in
2011 acquired
by GAP
Resource
Stavropol
Region
60
2009
2010
12
Reconstruction of the
Vertunovsky breeder
operation of the
Vassilievskya poultry
farm with the production
capacity of 60million
hatching eggs/year.
Cherkizovo
Group
Penza
Region
53
2009
2010
13
Renovation and installation

of new equipment for
breeder farms Pskov
and Borovichi (Novgorod
Region) and broiler houses
Pervomayskaya, Novgorod
and Valdai farms. The total
capacity will increase by 36
tonnes of broiler meat/year.
Rubezh Group
of Companies
Novgorod
and Pskov
Regions
First stage
123.3
2009
2012
Source: Authors presentation based on information obtained from market operators,

companies announcements, development programmes, etc.
170
Annex 9 - Broiler meat production (Far

East Russian Federation): investment
model assumptions, results and
sensitivity
Table 56: Investment cost to set up a large- scale broiler
production farm, in 2012 prices
Investment cost, in RUR
million
Percent
699
64
Equipment for broilers
91
Slaughter (building)
33
Slaughtering equipment
75
Incubator building
11
Incubator equipment
43
145
13
1098
100
Fixed assets
Poultry house
Other
Total
Source: Authors calculations based on available business plans.
171
The following main assumptions about input prices and

productivity were used to calculate investment efficiency in a
large-scale broiler production farm:
o
ne hatching egg costs RUR13.23 (expected to increase by
6percent annually);
o
ne incubation egg costs RUR4.11 (expected to increase by
6percent annually);
e
gg hatchability for the first four years of the project was
assumed to be 75 percent and 80 percent in the following
years;
livability (rate of survival) of broilers was set at 93 percent;
t arget weight of the broiler in the first ten years of the project
is two kilograms and 2.2 kilograms in the following years;
a verage cost of feed is RUR12.48 per kg (expected to increase
by 17.5 percent yearly);
f eed conversion rate is 2.1 kg of feed per 1 kg of weight in the
first year, 2.0 kg in the second year and 1.9 in the following
years;
o
perational costs such as gas, electricity, work force and others
account for RUR44-49 per kg.
Considering those assumptions, the production cost of poultry
meat should reach RUR78 per kg. This cost increases by
RUR7.11 per kg including the delivery cost.
The following are assumptions about outputs and prices:
o
utput of meat is expected to reach 78 percent per head,
approximately 1.56-1.73 kg of meat per broiler;
a verage poultry meat sales price of RUR123 per one kg
provides the company with a gross income of RUR45 per
one kg of broiler meat. The sales price is expected to grow by
12percent per year;
t otal quantity of meat farms will be able to supply will gradually
increase until it reaches 12500 tonnes of meat per year in the
eighth project year.
172
Table 57: Sensitivity analysis of investments in broiler meat

production
NPV sensitivity
(billion RUR)
Feed cost fluctuations, RUR/kg
Average meat price,

RUR/kg
9.984
11.232
12.48
13.728
15
87
-1.10
-1.35
-1.61
-1.86
-2.32
111
0.30
0.05
-0.20
-0.46
-0.92
123
1.03
0.78
0.53
0.27
-0.19
135
1.76
1.51
1.26
1.00
0.54
148
2.49
2.24
1.99
1.73
1.27
14 %
16 %
18 %
Input cost (feed) inflation
Output prices inflation
20 %
22 %
8%
-0.15
-0.31
-0.44
-0.68
-0.89
10%
0.32
0.16
0.02
-0.21
-0.42
12%
0.82
0.66
0.53
0.29
0.08
14%
1.36
1.20
1.07
0.83
0.62
16%
1.94
1.78
1.65
1.41
1.20
Average feed conversion rate, kg of feed per kg of meat
Average meat price,

RUR/kg
2.02
1.92
1.82
1.75
1.62
87
-1.74
-1.61
-1.47
-1.34
-1.21
111
-0.33
-0.20
-0.07
0.06
0.19
123
0.39
0.53
0.66
0.79
0.92
135
1.12
1.26
1.39
1.52
1.65
148
1.85
1.99
2.12
2.25
2.38
IRR sensitivity
(Percentage)
Average meat price,

RUR/kg
2.02
1.92
1.82
1.75
87
Negative
Negative
Negative
Negative
1.62
0
111
10
12
123
14
15
17
18
19
135
21
22
23
24
25
148
26
27
28
29
30
Payback period sensitivity

(Years)
Average meat price,

RUR/kg
2.02
1.92
1.82
1.75
87
1.62
-
111
11
10
10
123
135
148
Source: Authors calculations.
173

pork sector
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project at
full
capacity
Construction of a
swine complex for one
million pigs (90000
tonnes of pig meat/
year).
GK Rusagro
Belgorod
Region
433.3
2009
2016
Construction of a
swine complex in
Zherdevsky and
Sampursky Districts
for one million pigs/
year, including breeder
farms.
LLC Tambov
bacon
Tambov
Region
320
2010
2014
Construction of
a slaughter and
processing plant with a
capacity of 100 tonnes
per day (consisting of
three pig farms and
three rearing farms for
330000 pigs).
LLC AltayAltay Region

myasoprom
233.3
2011
2013
Construction of a pigbreeding complex with

capacity of 50000
tonnes of pig meat per
year in five districts of
the region.
LLC Resurs
Tambov
Region
230.5
2011
2012
Commissioning in
Pristensk Area for the
first phase of a rearing
farm for 20000 pigs:
50000 tonnes of pork/
year.
Agroindustrial
holding Miratorg
Kursk
Region
210
2010
2018
Name and brief

project description
174
Name and brief

project description
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project at
full
capacity
JSC Bryansk
Meat Processing
Factory
Bryansk
Region
116.7
2010
Investor - LLC
UniversStroyluxe
Kursk
Region
116.7
2010
2011
Construction in
Vygonich Area of
two pig farms of
300000heads, or
33-35000 tonnes/
year. The complex
will include four
commercial farms with
2.5000 pigs each,
a breeding farm for
1.8000 pigs, a feed
mill with a production
capacity of 30 tonnes/
hour and a selectionhybrid center.
Construction of
pig farm in the
Fatezhsk Area for
112000heads/year
with a complete
production cycle,
including slaughter,
prime processing and
a feed mill. Target
capacity: 50000
tonnes of pork.
Construction of swine
complex for 250000
pigs in Yetkulsky,
Chebarkulsky and
Nyazeptrovsk Districts.
Payback period is
expected not to
exceed five years.
Romkor
Corporation
Chelyabinsk
Region
> 100
2010
2015
Construction of the
pig farm Glebovsky
for 52000 pigs. The
complex will also
include a feed mill and
other manufacturing.
Dmitrova gora
(Agropromkomplektatsiya)
Tver Region
100
2010
2013
10
Construction of the
pig farm East-Siberian,
for 12.900 tonnes of
meat in live weight/
year. Project payback
period is estimated to
be eight years.
CJSC Siberian
agrogroup
Buryat
Republic
100
2011
2013
175
Name and brief

project description
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project at
full
capacity
CJSC Siberian
agrogroup
Buryat
Republic
86.6
2011
11
Construction of a pig
farm for
70000heads in
Zaigraivsk District.
Production capacity is
13000 tonnes of pork
meat in live weight/
year; the payback
period is eight years.
12
Increasing the capacity

of pig farm in order
to reach the level of
27000heads/year,
or 37.5000 tonnes of
meat in live weight.
Uralsky (affiliate
of CJSC Siberian
agrogroup)
Sverdlovsk
Region
50-66.7
2011
2012
13
Opening of a new pig

complex for 5250 pigs
in Budanovka Village
in Zolotukhinsky Area
with a capacity of
14500 tonnes/year.
OJSC Global Eco
Kursk
Region
64
2011
2012
14
Finalizing the fifth pig

farm Troparevo that
has a capacity 55000
pigs/year.
JSC Ostankino
Meat Processing
Moscow
Region
15
2009
15
Construction of
pig complex in
Bogdanovich and
Kamyshlovo Areas:
two independent
farms, each of which
includes a reproducer,
rearing and feed grow.
Construction started in
2007. Capacity: 25000
tonnes of meat/year.
CJSC Pig farm

Uralsky (affiliate
of CJSC Siberian
agrogroup)
Sverdlovsk
Region
143.3
2007
2009
176
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project at
full
capacity
16
Construction of two
pig complexes in
Karachai District.
The complexes can
hold 63000 pigs and
2530 sows and the
slaughterhouse has a
capacity of 20 tonnes/
shift.
LLC Bryansk
Meat Processing
Complex (TsarMyaso Group)
Bryansk
Region
2007
2012
17
Completion of the
pig farm Zhuravskii,
and 1200gilts
were delivered to
reproducer.
Agroindustrial
holding Miratorg
Belgorod
Region
56.7
2009
18
Completion of the last,

fourth area of the pig
complex in Millerovo
District, which has
a capacity of 11000
tonnes of pork/year.
GC Russian
Agroindustrial
Trust
Rostov
Region
53.3
2008
2011
Name and brief

project description

177

beef sector
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project
at full
capacity
Phase one of beef

production and processing
project completed in 2010.
Payback period is 15 years.
In December 2011, four
new farms in Trubchevsk
and Pochep Areas were
populated with 14000
Aberdeen-Angus breeding
cattle. The total volume of
six cattle farms accounts
to 20000heads. By 2014,
Agro-industrial
the project will comprise 37
holding Miratorg
farms with 274000 animals,
112000 of which will be
the breeders. Feedlots
will allow breeding up to
37000 animals. Production
capacity of the project is
48000 tonnes of meat/
year. Slaughter and primary
processing facilities will
be built in 2013-2014.
The project requires
150000hectares of land.
Bryansk
Region
800
2009
2014
Construction of the first

of a set of five rearing
complexes for 5860heads
of beef cattle.
Agro-holding
Marble Meat of
Kalmykia
Republic
of
Kalmykia
133
2011
Construction of a farm for

beef production for 4000
cows or 2000 tonnes of
beef.
JSC
Maximovsky
Meat
Processing
Complex
Tambov
Region
66.1
2010

description
178
2013

description
Construction of a dairy
and meat complex for
600heads of cattle in
Goreloe. In 2012 there was
an annual production of
4000 tonnes of milk and
180 tonnes of meat.
A beef cattle breeding

farm, started in 2007 in the
Kaluga on 3000hectares,
produced 1.1thousand
heads in 2012 and
2500heads in 2013. The
total population is projected
to reach
2 25000 bulls in 2016.
The project uses Hereford
and Simmental breeds,
mainly from Germany and
Russian Federation.
Expansion of marbled
beef project in Hlevensky
District.
Establishment of new beef

cattle farms in Pytalovo
Area.
1.4000heads of Aberdeen
Angus and Hereford
breeders from the United
States were delivered at
the end of 2010 to the
farm Stevenson Sputnik.
1.8thousand head were
delivered to LLC Breeding
Farm Angus-Shestakovo in
fall 2011.
Implementing
company
(holding)
Region
Investment,
million
USD
Starting
year
Project
at full
capacity
CJSC Agrocomplex
TAmbovsky
Tambov
Region
33.3
2011
2013
LLC Nesterovka
Kaluga
Region
EUR 4million
2007
2013
LLC Allbeef
Lipetsk
Region
No data
2010
2011
LLC Gerefordcenter
Pskov
Region
Around 20
2011
2013
LLC StevensonVoronezh
Sputnik and LLC
Region
Angus
38
2010
2012

179
180
1115
510
2187.82
1051714
1287349
816.96
Export (value,
thousand USD)
Export (quantity,
tonne)
Export (price,
USD/tonne)
Import (value,
thousand USD)
Import (quantity,
tonne)
Import (price,
USD/tonne)
2007
1099.98
1217587
1339318
2015.56
2813
5671
2008
1122.04
948459
1064212
1046.74
5896
6172
2009
Calendar year
1326.51
650432
862807
925.12
18655
17258
2010
1417.68
403524
572068
748.83
18806
14082
2011
1417.68
403524
572068
748.83
18806
14082
12/2011
1505.27
469561
706814
718.35
15386
11053
12/2012
Year to date
6.18
16.37
23.55
-4.07
-18.18
-21.51
Percent
change
Calendar Year: 2007-2011, Year to Date: 12/2011 & 12/2012
Commodity: 0207, Meat and Edible Offal of Poultry (Chickens, Ducks, Geese, Turkeys And Guineas), Fresh, Chilled or Frozen
The Russian Federations Yearly Statistics
Table 58: Foreign trade statistics: poultry, yearly, 2007-2012
Annex 12 - Foreign meat trade
Poultry
2161
3123
22463
1261
Ukraine
Hungary
Argentina
Belgium
Denmark
3751
49694
France
Finland
71621
245694
Brazil
Germany
634887
1051714
2007
United States
World
Partner country
Import
3390
3749
15018
6321
3630
58179
95688
294935
835895
1339318
2008
1075
7423
6192
6744
5482
59967
97486
131719
733133
1064212
2009
Calendar year
5145
25697
11890
9811
14907
165
40329
123868
257693
331208
862807
2010
3922
4723
5116
6824
7143
11417
31736
32442
150010
307044
572068
2011
3922
4723
5116
6824
7143
11417
31736
32442
150010
307044
572068
12/2011
7392
979
9057
19477
10580
68937
35466
10334
156008
338312
706814
12/2012
Year to date
88.49
-79.26
77.04
185.41
48.12
503.8
11.75
-68.15
10.18
23.55
Percent
change
Value in thousand USD
181
182
Abkhazia
China
Tajikistan
Azerbaijan
Svalbard & Jan

Mayen
Panama
Norway
Belize
13
650
120
5671
2008
199
2486
1428
679
6172
2009
Calendar year
Source: Customs Committee of the Russian Federation and GTIS.
24
Viet Nam
1115
2007
Hong Kong
World
Partner country
Export
264
45
1823
4814
6083
17258
2010
38
87
204
257
1948
4661
6886
14082
2011
38
87
204
257
1948
4661
6886
14082
12/2011
3224
1540
5491
11053
12/2012
Year to date
-100
-100
-100
-100
-100
-98.39
-100
65.49
-66.97
-20.25
-21.51
Percent
change
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
0
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Figure 65: Foreign trade statistics: poultry imports, monthly,

2009-2012
300 000
1 800
250 000
1 600
200 000
1 400
1 200
150 000
1 000
100 000
800
600
50 000
400
200
Import value,
thousand USD (left axis)
Export value,
Import quantity,
tonnes (left axis)
3 500
3 000
500
Export quantity, tonnes

(left axis)
0
Import price,
USD/ tonne (right axis)
Figure 66: Foreign trade statistics: poultry export, monthly,

2008-2012
2 500
2 500
2 000
2 000
1 500
1 500
1 000
1 000
500
Export price,
USD/ tonne (right axis)
183
184
2436
671739
Import (quantity,
tonne)
Import (price, USD/

tonne)
1636651
Import (value,
thousand USD)
2148
90
Export (quantity,
tonne)
Export (price, USD/

tonne)
194
Export (value,
thousand USD)
2007
2782
790955
2200464
3232
60
194
2008
2927
635670
1860679
3123
162
505
2009
Calendar year
Commodity: 0203, Meat of Swine (Pork), Fresh, Chilled or Frozen
3001
640626
1923034
2677
120
320
2010
Table 59: Foreign trade statistics: pork meat, yearly, 2007-2012
3211
656590
2108704
6170
46
287
2011
3211
656590
2108704
6170
46
287
12/2011
3341
720241
2406649
4619
33
151
12/2012
Year to date
4.04
9.69
14.13
-25.13
-29.62
-47.3
Percent
change
Pork
39426
Belgium
23686
Ukraine
Ireland
37611
180388
United States
France
218595
Denmark
73199
159079
Canada
Spain
97329
698861
Brazil
Germany
1636651
2007
World
Partner country
Import
34775
45559
88437
102549
435878
178763
260368
189302
697029
2200464
2008
71
40977
70784
82705
298996
195117
105416
232696
769404
1860679
2009
Calendar year
22444
44157
1971
86559
96121
177738
222913
178006
316234
712722
1923034
2010
46155
51311
57132
96631
173554
186676
260034
339333
353079
429934
2108704
2011
46155
51311
57132
96631
173554
186676
260034
339333
353079
429934
2108704
12/2011
48648
44539
89978
67615
203959
292692
213490
565785
302686
392951
2406649
12/2012
Year to date
5.4
-13.2
57.49
-30.03
17.52
56.79
-17.9
66.73
-14.27
-8.6
14.13
Percent
change
185
186
Abkhazia
Kazakhstan
0.086
0.086
2008
30.885
30.885
2009
Calendar year
2007
World
Partner country
Export
25.985
4.289
30.274
2010
2011
12/2011
3.569
3.569
12/2012
Year to date
n/a
n/a
n/a
Percent
change
60
80
20
0
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
0
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Figure 67: Foreign trade statistics: pork meat imports,

monthly, 2009-2012
300 000
4 000
250 000
3 500
200 000
3 000
2 500
150 000
2 000
100 000
1 500
50 000
1 000
500
Import value
Export value
Import price USD/tonne
(right axis)
200
180
160
140
120
100
80
Export price USD/tonne

(right axis)
0
Import quantity tonne

(left axis)
Figure 68: Foreign trade statistics: pork meat exports, monthly,

2009-2012
12 000
10 000
8 000
6 000
4 000
2 000
Export quantity tonnes

(left axis)
187
188
712812
2383.1
Import (price,
USD/tonne)
1698705.944
2836.5
11
31.471
Import
(quantity,
tonne)
Import (value,
thousand (USD)
Export (price,
USD/tonne)
Export
(quantity,
tonne)
Export (value,
thousand USD)
2007
4335.23
86
371.659
2009
3252.09
791159
3517.48
624077
2572922.413 2195178.435
2495.57
90
224.08
2008
Calendar year
Commodity: 0202, Meat of Bovine Animals, Frozen
3419.07
606083
2072237.098
2617.51
4.366
2010
2011
3913.28
566545
2217048.923
5185.27
28
147.426
Table 60: Foreign trade statistics: bovine meat frozen, yearly, 2007-2012
3913.28
566545
2217048,92
5185.27
28
147,426
12/2011
4418.83
584615
2583316.18
7308.71
16
115.022
12/2012
Year to date
12.92
3.19
16.52
40.95
-44.65
-21.98
Percent
change
Beef
7608.095
Italy
92926.361
14427.712
Germany
Ukraine
259401.483
Argentina
Mexico
157187.371
Paraguay
8219.121
Australia
United States
50290.68
1074881.155
Brazil
Uruguay
1698705.944
2007
World
Partner country
Import
62108.311
27091.809
23882.894
212176.375
71853.878
269676.366
227217.011
262859.416
1344138.619
2572922.413
2008
59111.227
3096.221
6332.394
470031.225
11622.925
161321.84
59786.534
226239.527
1173074.819
2195178.435
2009
Calendar year
43208.884
42775.113
55370.667
113489.252
10541.157
87875.951
210740.807
148384.445
262139.18
972393.667
2072237.098
2010
34933.609
39466.235
41463.002
56549.995
88242.631
163669.743
182910.782
239471.504
288561.237
920217.661
2217048.923
2011
34933.609
39466.235
41463.002
56549.995
88242.631
163669.743
182910.782
239471.504
288561.237
920217.661
2217048.92
12/2011
24952.126
22836.044
15436.093
36822.137
118188.193
220022.267
546990.862
122937.282
277565.953
1096487.5
2583316.18
12/2012
Year to date
-28.57
-42,14
-62.77
-34,89
33.94
34.43
199.05
-48.66
-3.81
19.16
16.52
Percent
change
189
190
Denmark
Georgia
Germany
Netherlands
Poland
72.298
70.816
0.233
18.414
2397
224.08
2008
62.051
105317
139.68
371.659
2009
Calendar year
Korea, South
31.471
Belize
Kazakhstan
Panama
31.471
2007
South Ossetia
World
Partner country
Export
4366
4366
2010
0.194
0.589
146.643
147.426
2011
0.194
0.589
146.643
147.426
12/2011
14.708
55.685
115.022
12/2012
Year to date
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-100
-100
-62.03
-21.98
Percent
change
Figure 69: Foreign trade statistics: bovine meat frozen imports,

monthly, 2009-2012
5 000
350 000
4 500
300 000
4 000
250 000
3 500
200 000
3 000
150 000
2 000
1 500
100 000
1 000
50 000
500
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Import value
thousand USD (right axis)
Import quantity
tonnes (right axis)
Import price
USD/tonne (left axis)
Figure 70: Foreign trade statistics: bovine meat frozen exports,

monthly, 2009-2012
160
140
120
100
80
60
40
0
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
20
Export value
Export quantity
tonnes (left axis)
10 000
9 000
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0
Export price
USD/tonne (right axis)
191
192
21133
3352.9
Import
(quantity,tonne)
Import (price, USD/

tonne)
Export
(price, USD tonne)
70858.4
Export
(quantity, tonne)
Import (value,
thousand USD)
Export
(value, thousand
USD)
2007
4506.54
19571
88196.63
1954.55
0.086
2008
4951.23
11765
58250.53
6881.68
30.885
2009
Calendar year
Commodity: 0201, Meat of Bovine Animals, Fresh or Chilled
4969.1
19748
98128.18
6806.2
30.274
2010
2011
5596.8
35732
199983.47
Table 61: Foreign trade statistics: bovine meat fresh or chilled, yearly, 2007-2012
5596.8
35732
199983.47
12/2011
5309.16
41165
218550.3
4406.57
3.569
12/2012
Year to date
-5.14
15.2
9.28
n/a
n/a
n/a
Percent
change
Brazil
33.784
30.346
Denmark
Austria
Moldova
3 811.043
Australia
24 225.95
Ukraine
Poland
24 225.95
Germany
38 661.11
Lithuania
United
States
70 858.4
2007
World
Partner
country
Import
292.383
5.046
1 428.414
1 026.115
2 889.336
8 849.542
27 422.13
45 958.15
88 196.63
2008
2009
79.511
10.26
43.757
81.797
1 504.434
9 531.085
150.488
15 103.15
31 433.39
58 250.53
Calendar year
304.917
377.369
1 274.492
6 300.07
63 83.922
14 389.18
663.748
25 213.08
42 116.19
98 128.18
2010
2 188.181
2 287.889
4 202.246
8 473.478
12 902.914
13 101.351
13 615.255
22 987.652
36 224.399
80 600.207
199 983.47
2011
2 188.181
2 287.889
4 202.246
8 473.478
12 902.914
13 101.351
13 615.255
22 987.652
36 224.399
80 600.207
199 983.47
12/2011
13 805.499
770.685
7 289.031
8 230.08
2 3164.72
16 935.466
18 257.393
40 542.403
14 058.928
68 361.823
218 550.3
12/2012
Year to date
530.91
-66.31
73.46
-2.87
79.53
29.27
34.1
76.37
-61.19
-15.18
9.28
Percent change
193
194
64
Svalbard & Jan

Mayen
Panama
Belize
Norway
Azerbaijan
Belgium
Denmark
Georgia
Germany
84
194
2008
17
91
58
61
505
2009
Calendar year
194
2007
Abkhazia
World
Partner country
Export
147
48
320
2010
276
287
2011
276
287
12/2011
73
151
12/2012
Year to date
n/a
n/a
n/a
n/a
n/a
-100
-100
-100
-100
-73.64
-47.3
Percent
change
Figure 71: Foreign trade statistics: bovine meat fresh or chilled

imports, monthly, 2009-2012
7 000
25 000
6 000
20 000
5 000
15 000
4 000
3 000
10 000
2 000
5 000
1 000
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Import value
Import quantity
tonnes (left axis)
Import price
USD/tonnes (right axis)
Figure 72: Foreign trade statistics: bovine meat fresh or chilled

exports, monthly, 2009-2012
30
8 000
25
7 000
6 000
20
5 000
15
4 000
3 000
10
2 000
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Export value thousand

USD (left axis)
Export price
USD/tonne (right axis)
1 000
0
Export quantity
tonnes (left axis)
195
196
307163
1075.1
Import (price,
USD/tonne)
330232.581
1208.26
62
74.446
Import
(quantity,
tonne)
Import (value,
thousand USD)
Export (price,
USD/tonne)
Export
(quantity,
tonne)
Export (value,
thousand USD)
2007
1311.93
321352
421592.642
1325.39
156
206.518
2008
1358.8
297762
404600.368
1362.68
227
309.485
2009
Calendar year
1389.72
291833
405565.234
1019.85
148
151.166
2010
1514.07
291005
440603.146
1385.81
874
1211.449
2011
1514.07
291005
440603.146
1385.81
874
1211.449
1681.16
273458
459726.872
1519.26
1944
2954.048
12/2012
Year to date
12/2011
Commodity: 0206, Edible Offal of Bovine Animals, Swine, Sheep, Goats, Horses, etc. Fresh, Chilled or Frozen
Table 62: Foreign trade statistics: edible offal, yearly, 2007-2012
11.04
-6.03
4.34
9.63
122.43
143.84
Percent
change
Offal
28939.877
31776.832
21311.185
22207.306
13323.389
21697.424
8602.611
United States
Denmark
Spain
Australia
Canada
France
Italy
3507.372
40940.604
Argentina
Austria
47961.085
330232.581
2007
Germany
World
Partner country
Import
6787.624
14539.731
25631.807
15031.173
28488.923
34153.477
17711.199
74406.175
44447.592
85031.813
421592.642
2008
7371.114
9158.255
20775.056
17314.534
17959.482
20078.982
16124.033
70262.589
68155.057
94082.841
404600.368
2009
Calendar year
10621.983
11470.625
17180.58
19005.38
20564.965
25924.618
17092.545
61495.913
51469.896
85470.854
405565.234
2010
16227.321
17027.217
18204.489
18892.108
24045.793
31626.347
34825.021
49288.394
54485.621
75125.3
440603.146
2011
16227.321
17027.217
18204.489
18892.108
24045.793
31626.347
34825.021
49288.394
54485.621
75125.3
440603.146
12/2011
14739.109
18570.169
16848.929
23361.818
23350.687
47307.158
29146.671
62317.588
72836.826
60241.875
459726.872
12/2012
Year to date
-9.17
9.06
-7.45
23.66
-2.89
49.58
-16.31
26.43
33.68
-19.81
4.34
Percent
change
197
198
Svalbard & Jan Mayen
Thailand
Unidentified Country
United States
29.794
206.518
2008
14.274
42.689
71.08
1.426
309.485
2009
Calendar year
Poland
Netherlands
Lithuania
32.998
Vietnam
Italy
74.446
2007
Hong Kong
World
Partner country
Export
7.614
30.291
151.166
2010
2.893
27.026
1181.53
1211.449
2011
2.893
27.026
1181.53
1211.449
12/2011
5.598
20.254
2927.272
2954.048
12/2012
Year to date
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-100
-100
147.75
143.84
Percent
change
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
0
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010
05/2010
06/2010
07/2010
08/2010
09/2010
10/2010
11/2010
12/2010
01/2011
02/2011
03/2011
04/2011
05/2011
06/2011
07/2011
08/2011
09/2011
10/2011
11/2011
12/2011
01/2012
02/2012
03/2012
04/2012
05/2012
06/2012
07/2012
08/2012
09/2012
10/2012
11/2012
12/2012
Figure 73: Foreign trade statistics: edible offal imports,

monthly, 2009-2012
60 000
2 000
50 000
1 800
1 600
40 000
1 400
30 000
1 200
1 000
20 000
800
600
10 000
400
Import value
Export value thousand

USD (left axis)
Import quantity
tonnes(left axis)
600
500
400
300
200
100
Export price USD/tonne

(right axis)
200
Import price
USD/tonnes (right axis)
Figure 74: Foreign trade statistics: edible offal exports,

monthly, 2009-2012
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
Export quantity tonnes

(left axis)
199
Russian Federation Meat sector review
Russian Federation
Meat sector review
FAO Investment Centre
Russian Federation: Meat sector review

Report No. 15 - July 2014
Report No. 15
Please address questions and comments to:

Viale delle Terme di Caracalla 00153 Rome, Italy
investment-centre@fao.org
http://www.fao.org/investment/en
I3533E/1/11.13
COUNTRy HIGHLIGHTS

Russian Meat Sector

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Russian Federation: Meat sector review

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FAO INVESTMENT CENTRE

The designations employed and the presentation of material in this information

 lobal medium-term meat market outlook

The Russian Federation meat sector in brief

Detailed review of the meat sector

Meat market concentration

Distribution of poultry, swine and cattle

Main breeds and crosses

Meat production technologies

Applicable state standards in the Russian

Annex 5 Profitability of poultry, pork, and beef

Leading meat brands

Major agroholdings and meat producers in the

Recent investments in the poultry sector

Broiler meat production (Far East Russian

Annex 10 Recent investments in the pork sector

Annex 11 Recent investments in the beef sector

Annex 12 Foreign meat trade

Communications support, Investment Centre Division, FAO, for

Acronyms and abbreviations

earnings before interest, taxes depreciation and

European Bank for Reconstruction and Development

Food and Agriculture Organization of the United

Food and Agricultural Policy Research Institute

First Independent Rating Agency

Federal Service of State Statistics

gross domestic product

gross national income

Government of Russian Federation

hazard analysis and critical control points

HORECA retail, hotel, restaurant and catering services

International Meat Secretariat

internal rate of return

Kornshtadt meat processing plant

London Stock Exchange

market price support

nominal protection coefficient

net present value

Organisation for Economic Co-operation and

World Organisation for Animal Health

open joint-stock company

Russian Classification of Economic Activities

purchasing price parity

producer support estimate

private subsidiary farming

Russian Academy of Agricultural Sciences

sanitary norms and rules

single commodity transfers

sanitary and phytosanitary (measures)

TCI Investment Centre Division of the Food and Agricultural

United States Department of Agriculture

value added tax

All-Russia Scientific Research Institute of Meat

All-Russia Scientific Research Institute Of Meat Cattle

VNIIZZH All-Russia Scientific Research Institute of Animal

Veterinary and Phytosanitary Surveillance Service

World Trade Organization

Russian Federation - Meat sector review

Market development and business considerations

and veal decreased by 0.5percent, down to only 17kg, during the

lobal medium-term meat market outlook