Russian livestock industry hampered by high feed costs
The US Department of Agriculture said that high feed costs are likely to hamper growth in Russia's burgeoning livestock industry this year until the new harvest reduces supply pressures.
The Russian pig herd is set to grow 1.8% to 17.51 million animals by the end of the year, although pork production is predicted to stay flat this year compared with a 4% growth in 2010, according to the USDA's Moscow attaché.
Also beef production is expected to be limited to 1.4 million tonnes in 2011, which is 2.4% less than last year, due to a sharp decline in the number of cattle.
"This accelerated decline in the cattle herd over the last two years is in direct consequence of increased feed prices, which increased slaughter rates starting in the summer of 2010," the Moscow voice said.
The severe drought last summer slashed the Russian harvest and cut feed supplies by 25%. Farmers were struggling to cope with record feed prices.
The Russian government distributed millions of tonnes of intervention grains and funded subsidies of more than $3 billion to support the livestock industry. USDA said, these costs are likely to be passed on to consumers.
"Inflation for meat products has been relatively low in 2010 compared to past years in Russia," it said. However, it added: "lower pork and poultry production growth and decreasing beef production will push prices for pork and beef higher in 2011."
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