WASHINGTON, Aug. 20, 2014 – Russia’s ban on fruits, vegetables, dairy, fish, meat, and poultry from several of the world’s exporters will impact European suppliers the most, but U.S. agricultural industries could also feel an impact. On Aug. 6, Russia implemented a one-year ban on countries that placed sanctions on Russia for its role in eastern Ukraine. The ban impacts Australia, Canada, the European Union, Norway, and the United States.

Last year, the U.S. poultry industry shipped $308 million in product to Russia, about 7.5 percent of total production, making Russia the second largest market for U.S. broiler trade, behind Mexico, according to USDA.

“We are in a fairly tight supply situation,” said Jim Sumner, president of the USA Poultry and Egg Export Council. “Domestic demand is strong, brought about by fairly high beef prices and a potential shortage of pork due to the porcine epidemic diarrhea (PED) virus. I don’t think we’ll have trouble finding markets.”

One concern is that Russian importers who have already made down payments on future shipments of poultry and other products will not have money to purchase new shipments from Brazil. “Exporters will also be left holding the bag if they can’t find other markets,” Sumner said. U.S. poultry products that already shipped will likely go to Africa, he added.

U.S. dairy and pork trade to Russia dwindled over the past few years. Last year, U.S. exporters sold $6.4 million in dairy products to Russia, down from 2010’s $86.4 million, according to USDA.

“For the past four years, the United States and Russia have had an on-going dispute over import documentation, which has stymied U.S. exports to Russia,” said Sara Dorland, analyst with the Daily Dairy Report and managing partner at Ceres Dairy Risk Management in Seattle. Even so, the U.S. dairy industry is not immune to the ban.

Russia is the world’s largest importer of butter and its second largest importer of cheese. In 2013, the country imported 89,844 metric tons of butter and 326,770 metric tons of cheese, according to the U.S. Dairy Export Council. Of that, 30 percent of the butter and 80 percent of the cheese came from Europe.

“To regain market share, European exporters could target regions currently served by New Zealand and the United States,” said Dorland. And EU supplies could displace U.S. butter into the Middle East, she noted.

U.S. pork exports to Russia fell after Russia banned U.S. pork from hogs fed ractopamine, a feed additive to promote leanness. Last year, U.S. pork producers sold $17.6 million in product to Russia, down from 2012’s $267.8 million, according to the U.S. Department of Commerce. Today, however, the U.S. pork supply is tight due to its struggle with the PED virus.

Russia currently imports large quantities of meat from Brazil, but it’s uncertain whether the country can ship additional meat to Russia in a timely manner, said Craig Botham and Azad Zangana, economists for Schroders, a U.K. investment bank.

“Global production data suggests the rest of the world does not produce enough to immediately meet Russian demand,” the economists state in a memo. “Sharp price rises consequently seem inevitable.”

Dorland added that it would take almost all of the cheese exports from New Zealand, Brazil, and Argentina to fill the hole left by European cheese.

Policy efforts will also buoy prices. EU officials announced Monday, Aug. 18, that in an effort to support domestic prices they would set aside 125 million euros ($167 million) to compensate producers for giving away or destroying a range of perishable vegetables that would have been sold to Russia.


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