Russia has increased the amount of money it is spending to revitalize its beef and dairy sectors and live animal exports from the United States to that country have soared as a result.
The Russian demand for live cattle is already impacting markets in the Northwest.
New Plymouth, Idaho, dairyman Greg Davis sent dairy cattle to Russia six weeks ago and knows of at least 400 animals from the Treasure Valley that were sold to Russian buyers over the last month.
“It’s not sort of or maybe happening. It’s definitely happening,” he said.
According to a recent report by USDA’s Foreign Agricultural Service, the Russian federal and regional governments have committed $10 billion over the next seven years to stimulate the country’s beef and dairy sectors.
That’s up from $5 billion previously.
Much of the money is being used to import high-quality breeding dairy and beef cattle, semen and embryos. The imports are primarily supported through subsidized loan interest rates.
The impact of the Russian investment is being felt heavily by the U.S. livestock industry.
Carl Lufkin, co-owner of Leadore Angus Ranch in east Idaho, has sent six loads of bred heifers to Russian buyers in the past year.
“The Russian government has dedicated a lot of money to (rebuild) their beef and dairy herds,” he said. “They’ve bought a lot of cattle in this area and the whole northwest (and) they pay good money for them.”
Lufkin said there is some concern about selling Russia this country’s best genetics. But he has spoken with several people who have worked with the Russian livestock industry and he’s convinced that country is far behind the U.S.
“They are light years behind us in knowing how to handle and breed cattle and how to be efficient raising them,” he said.
According to USDA, Russian imports of live cattle rose by almost 50 percent in volume and value in 2012, to 137,000 head worth nearly $500 million. More than 54 percent of the imports were from the U.S. and Russia was the top market for U.S. cattle exports in 2012.
Most of the exports were of bred heifers of beef breeds, but exports of dairy breeds showed strong growth.
According to the report, the pace of imports has slowed in 2013 because many large buyers reached their credit limits. However, with increased government support, it is expected that new buyers will enter the market.
“I believe with the continued funding from their government, Russian cattle producers will continue to purchase U.S. cattle,” said Marty Earnheart, meats and livestock marketing officer for the Montana Department of Agriculture.
Even if live animal sales decline, the report added, Russia will remain a strong market for bovine semen and embryos.
Earnheart believes there will eventually be a switch from live cattle to semen and embryos, “but I think for the near future it will continue to be live cattle purchases.”