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Russia investing heavily in becoming self sufficient in beef production

Saturday, July 28th 2012 - 00:10 UTC
Full article 17 comments
Oklahoma cowboy Anthony Stidham helping Putin bring beef production to pre-Stalin times Oklahoma cowboy Anthony Stidham helping Putin bring beef production to pre-Stalin times

Russian President Vladimir Putin has an ambitious plan to cut his country's 3 billion dollars annual import bill for beef. He even aspires to return Russia's beef industry to its pre-revolutionary stature.

To get there, however, he's depending on an unlikely saviour: Anthony Stidham, a 48-year-old, third-generation rancher from Oklahoma.

At Russia's largest beef farm, about 400 kilometres southwest of Moscow, Stidham is among a tiny group of foreign cattlemen hired to school locals in livestock rearing - everything from branding cows to easing a stuck calf through the birth canal.

If all goes according to plan, Russia could someday send foreign beef suppliers like Tyson Foods of Springdale, Ark., and Sao Paulo's Brasil Foods heading for customs.

With its expanding middle class and a tripling of some wages in recent years, Russia is experiencing a surge in demand for beef.

So Moscow has cut import quotas to help revive a cattle-breeding tradition decimated under the rule of Joseph Stalin.

Putin wants the country to meet 85% of its own meat needs by 2020, compared with 65% today; he's pumping money into the fledgling meat industry and letting it bring in talent - and cows - from abroad.

“There's no place in the US, Australia or anywhere in the world that will have cattle as good as what they are putting together here,” said Stidham, who was recruited last year after answering an advertisement in a farming publication.

Over the past decade, Stidham's employer, Miratorg Agribusiness Holding, Russia's biggest meat importer, has received state financing, investment subsidies and tax benefits to start the 800 million dollars project in Bryansk.

Set up by brothers Alexander and Viktor Linnik in 1995, the company became Russia's largest pork producer in 2010 and has moved into poultry.

To help fund continued expansion, it sold 3 billion Roubles (92.7 million) of bonds last year and may sell more this year, Chief Financial Officer Vadim Kotenko says. An initial public offering is being considered.

Miratorg has Texas-size ambitions: It already runs 16 beef farms around Bryansk, with an additional 17 set to open in the area by the end of 2013.

Another three are under construction in Kaliningrad, on the Baltic Sea. Each operation has about 3.000 breeding cows.

“There's just nothing in the US that big,” Stidham said, in reference to the Bryansk complex of ranches.

However Russia has only about 250.000 beef cows, representing about 1% of its total herd of mainly dairy cattle. So Miratorg has brought in 60.000 head of livestock in the last twelve months.

At Bryansk, the plan is to almost double the size of the parent herd by the end of 2013.
With new calves, the integrated operation, which involves everything from slaughterhouses to meat-processing facilities, will expand more than fourfold to 250.000 head by 2014.

But Russians consume only 17 kilograms of beef per capita annually, or half the US equivalent, reports the Moscow-based National Meat Association, so domestic consumption should have plenty of room to rise.

Russia purchased 1.1 million tons of beef and veal from abroad last year, according to USDA data, the equivalent of about 3.3 million fattened steers. Beef imports were valued at $2.6 billion in 2011, making up about 33% of domestic consumption.

Tyson Foods, Brasil Foods, Cargill and JBS are among the biggest suppliers of beef to Russia, according to the U.S. Meat Export Federation. (Argentine Beef Packers SA).
 

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  • Pirat-Hunter

    This is good news for Russia let's hope Putin gets his wish.

    Jul 28th, 2012 - 01:12 am 0
  • redpoll

    So great. Argentina which has some of the best beef genetics in the world sits on its butt in the stands applauding the yankee play when they should be out playing on the field as competitors

    Jul 28th, 2012 - 01:48 am 0
  • Truth_Telling_Troll

    @2

    Nah, Australia, Brazil, Canada, Russia, Paraguay, Uruguay, the USA, Canada, Japan, and the EU can have the market. Argentina is not interested in selling its meat outside the country, the internal market being the world's biggest consumer per capita is enough. We don't need the rest of the world.

    Jul 28th, 2012 - 01:51 am 0
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