Russia may halt U.S. beef, pork imports: trade group
By Theopolis Waters and K.T. Arasu
CHICAGO (Reuters) - U.S. pork and beef exports to Russia could halt on Saturday following Moscow's requirement that the meat be tested and certified free of the feed additive ractopamine, a move analysts said smacked of political retaliation.
The measure by Russia - the sixth-largest market for U.S. beef and pork - comes on the heels of U.S. Senate approval of a trade bill to punish Russian human rights violators as part of a broader objective to expand bilateral commerce.
The U.S. Meat Export Federation told its members by email that since the U.S. Department of Agriculture had no testing and certification program in place for ractopamine, the Russian requirement could effectively halt U.S. pork and beef exports to the country by Saturday.
USMEF, a non-profit trade association, said more than 210 shipping containers of U.S. pork and beef valued at about $20 million were on their way to Russia.
"This seems to be in retaliation to the Senate's passage of the trade bill with Russia ... there is certainly no doubt about it," Rich Nelson, chief strategist at research and brokerage company Allendale Inc, said on Friday.
He said Russia purchased 1.4 percent of U.S. pork production and 0.6 percent of beef production, adding that any suspension of imports from the United States would weigh on cattle and hog futures at the Chicago Mercantile Exchange.
CME February hog futures were 1.15 cents, or 1.4 percent, lower at 83.3 cents per lb at 11:19 a.m. CST (12:19 a.m. EDT). February live cattle futures fell 0.62 cent, or 0.5 percent, to 130.4 cents per lb.
In its email, obtained by Reuters, USMEF said: "...This new requirement effectively means that the Russian market will be closed to pork and beef exports beginning this Saturday (December 8)."
USMEF spokesman Joe Schuele confirmed the email.
"The deadline is concerning because of an inability to meet this paperwork requirement," Schuele said.
A USDA spokesman was not immediately available for comment.
The email said chief U.S. agricultural trade negotiator Isi Siddiqui and White House international economic affairs adviser Michael Froman were expected to travel to Moscow next week to press the Russian government to postpone the implementation of its requirement.
Commerce Department data shows the United States has exported 213.681 million pounds of pork to Russia so far this year. In 2011, exports to Russia totaled 190.931 million lbs.
Russia imported 121.71 million lbs of U.S. beef and veal between January and September. Last year, such imports totaled 145.37 million.
USMEF data showed that U.S. beef exports to Russia in the first nine months of 2012 were valued at $203.7 million, while pork exports totaled about $202.9 million for the same period.
"My first inclination is how much of this is related to geopolitics and how much of this is the Russians trying to negotiate political issues through our pocketbooks," said Mike Zuzolo, president of Global Commodity Analytics.
"Without a doubt, this issue is weighing on both the hogs and cattle markets. All year long the lower-level dollar and the strong export pace have helped underpin our situation whenever domestic demand has weakened," he said.
(Additional reporting by Mark Weinraub in Chicago and Chuck Abbott in Washington; Editing by Dale Hudson and Andrew Hay)
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