Required Report - public distribution

**Date:** 2/7/2005

**GAIN Report Number:** RS5010

RS5010

**Russian Federation**

**Livestock and Products**

**2004 Another Difficult Year For Russian Livestock Industry**

**2005**

**Approved by:**

![](media/image1.wmf)Allan Mustard

U.S. Embassy

**Prepared by:**

Mary Petry and Mikhail Maximenko

**Report Highlights:**

The Russian livestock industry experienced a decline in beef production
and slow growth in the pork sector as producers slaughtered at lower
than normal weights to take advantage of rising meat prices and to
offset continued high feed prices. While the pork sector is forecast to
resume faster expansion in 2005, the beef industry will continue its
decade-long implosion. The rising prices in 2004 resulted from
increasing demand unfulfilled by imports due to tariff and non-tariff
barriers and slowing Russian production.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 3](#__RefHeading___Toc95622698)

[Feed supplies 3](#feed-supplies)

[Table 1. Feed at Agricultural Organizations, as of December 1
3](#table-1.-feed-at-agricultural-organizations-as-of-december-1)

[Trade 3](#trade)

[Two Food Ingredients Banned 4](#two-food-ingredients-banned)

[Ministry of Agriculture Plans for the Future
4](#ministry-of-agriculture-plans-for-the-future)

[Table 2: Russian Wholesale Prices (Offer Prices), Half Carcasses,
January 2003 -- November 2004.
5](#table-2-russian-wholesale-prices-offer-prices-half-carcasses-january-2003-november-2004.)

[Policy 5](#policy)

[Table 3: Russian Meat Import Quota Volumes for 2005, MT
6](#table-3-russian-meat-import-quota-volumes-for-2005-mt)

[Marketing 6](#marketing)

# Executive Summary

Russian livestock producers faced more difficult conditions than
expected in 2004, as input costs remained high and rising meat prices
enticed producers to slaughter at lower than normal weights. As a
result, beef production declined and the pork sector grew slower than
previously forecast. Despite the decline in the swine herd in 2004, the
sector is forecast to expand faster in 2005 as the pig crop rebounds.
The beef industry will continue its decade-long implosion, as
investments prove more attractive in other agricultural sectors. In
2004, rising prices resulted from increasing demand unfulfilled by
Russian production, tariff and non-tariff barriers to imports,
increasing input prices, and high prices in key exporting countries.

# Production

The Russian swine herd is forecast to increase by four percent in 2005.
Ending stocks in both 2004 and 2005 were revised down from the previous
report due to lower than expected pig crops. High feed costs and pork
prices encouraged early slaughter in 2004 at lower than normal weights.
The downward revision in the swine herd is reflected in reductions in
the 2004 and 2005 production forecasts. Nevertheless, Russian pork
production in 2005 is forecast to increase by two percent due to a
larger pig crop and a return to normal slaughter weights.

Cattle ending stocks are forecast to decrease by almost six percent in
2004 due to higher than expected slaughter rates. In 2005, the cattle
herd is forecast to decrease another five percent. Correspondingly, beef
production is forecast to decrease by three and five percent in 2004 and
2005.

## Feed supplies 

Total feed supplies were lower in 2004 in comparison with 2003, but
decreasing cattle numbers kept this situation from becoming a crisis for
the swine and poultry sectors.

## Table 1. Feed at Agricultural Organizations, as of December 1

  ------------------- ------------------ ---------------- ----------------
                                                          

                      2004               2003             2002

  Feed, mln tons      22.8               24.0             26.5

  Including feed      6.7                6.9              9.4
  grain                                                   

  Per animal, tons of 1.37               1.34             1.37
  feed                                                    
  ------------------- ------------------ ---------------- ----------------

Source: Federal State Statistics Service

# Trade

Russian pork imports are forecast to increase by five percent in 2005.
The forecast for Russian imports in 2004 was revised down by five
percent because of several factors: foot and mouth disease in Brazil,
rising pork prices in Europe, changing EU agricultural market structure
due to expansion, and the appreciating euro.

Russian beef imports are forecast to rise by six percent in 2005 due to
the decrease in Russian production and continuing strong consumer
demand. In 2004, Ukrainian domestic production and supply problems led
to a shift toward Brazilian and Argentine imports. Due to the
preferential trading agreement that keeps Ukraine outside of the TRQ, it
will regain its spot as the largest exporter to Russia in 2005 if beef
supplies are sufficient.

The TRQs are also causing the amount of processed pork and beef imported
by Russia to rise. Processed meat products (tariff code 16) are not
covered by the TRQs and its tariff has remained unchanged. Thus, the TRQ
licensing difficulties and high over-quota tariff have made imports of
processed pork and beef more attractive relative to raw meat than in the
past. The second change induced by the TRQ is an increase in the amount
of boneless meat being imported. While this trend is strong for both
meats, Russian beef imports have shown the most significant change as
imports went from mostly bone-in beef to almost 90 percent boneless beef
in 2004. The shift toward boneless meat has happened because Russian
importers want to use their limited TRQ licenses on higher value and
more profitable cuts. (Note: When calculating Russia's imports (carcass
weight equivalent) for 2004, the increase in boneless beef and pork
compensated for the decrease in total product weight reported in the
Russian import statistics.)

Though 2004 data is incomplete, it is clear that the pork and beef TRQs
will not fill completely due to the problems administering the TRQs in
the first quarter of 2004 and other issues. Please see GAIN Report
RS4068 for the full details of the obstacles that prevented complete
quota fill in 2004.

## Two Food Ingredients Banned

The Russian Federal Service for Health and Protection of Consumer Rights
(RosPotrebNadzor) recently banned the importation of food products into
the Russian Federation that have been processed or manufactured using
the preservatives E216 (propyl p-hydroxybenzoate (propyl paraban)) and
E217 (sodium propyl p-hydroxybenzoate). Please see GAIN Report RS5004
for more details.

## 

## Ministry of Agriculture Plans for the Future

The Ministry of Agriculture has developed a strategy to reduce the
market share of imported meat in Russia to 20 percent by 2010. The
strategy also predicts that Russian production of animal products will
increase by 80-90 percent in the next 15 years. The strategy document
outlines that the main instruments for achieving the goal of \"forced
development of livestock farming" as "restrictions on imports of meat
and customs tariff and non-tariff regulation in order to ensure the
predictability of the TRQ mechanism for the next 5-7 years." The
ministry expects household and government spending on meat and dairy
products to continue growing and that per capita meat consumption could
increase by 100 percent over a 15-year period. The ministry urges
greater state support for livestock farmers and breeders, including
through leasing domestic and foreign breeding stock. The strategy calls
for subsidized investment capital for modernizing infrastructure and
production equipment and the construction of new enterprises. It also
notes the importance of streamlining and centralizing procurements of
animal products for state needs and ensuring veterinary and sanitary
control over meat quality. According to the Agrarian Marketing
Institute, imported meat had a 30 percent share of the Russian market in
2003, including 51.5 percent of the poultry market, 21.6 percent of
pork, and 18.8 percent of beef. In the first nine months of 2004, the
total import share was 26 percent, including 43 percent for poultry, 15
percent for pork, and 21 percent for beef.

The Ministry's strategy is an interesting indicator of the changing
attitude in Russia regarding the need for greater government
intervention in the agricultural sector. In contrast to the grain
sector, in recent years the livestock sector has increased lobbying for
more government subsidies and protectionism. Though the implementation
of the plan seems unlikely due to the Russian Government's budget
constraints, it is more sophisticated than previous versions because it
argues for subsidies through mechanisms already in use for other
programs (such as subsidized credit for farm machinery) rather than
proposing the creation of new ways of distributing subsidies solely to
livestock producers.

## Table 2: Russian Wholesale Prices (Offer Prices), Half Carcasses, January 2003 -- November 2004.

  ------------ ------------ ------------ ------------ ------------ ------------
  **Date**     **Exchange   **Domestic   **Imported   **Domestic   **Imported
               rate,        beef**       beef**       pork**       pork**
               ruble/\$**                                          

  01/30/2003   31.80        50.17        48.40        48.75        45.50

  02/28/2003   31.57        51.17        49.95        44.75        46.14

  03/30/2003   31.38        48.67        48.01        40.37        44.90

  04/30/2003   31.10        48.00        46.35        40.25        44.62

  05/30/2003   30.66        48.00        48.52        41.02        48.45

  06/30/2003   30.34        47.00        49.45        42.51        49.00

  07/30/2003   30.24        49.00        49.30        42.39        49.11

  08/30/2003   30.50        49.00        49.57        43.50        51.83

  09/30/2003   30.61        58.00        52.75        51.33        61.60

  10/30/2003   29.82        51.17        54.81        52.00        60.93

  11/30/2003   29.74        52.38        52.31        50.75        55.53

  12/30/2003   29.25        51.00        54.96        52.50        53.89

  01/30/2004   28.48        64.42        63.61        54.63        54.81

  02/29/2004   28.52        65.50        64.68        59.50        52.67

  03/30/2004   28.49        66.00        67.05        55.17        55.05

  04/30/2004   28.88        62.50        68.00        58.00        60.69

  05/30/2004   28.99        68.50        67.64        64.25        67.75

  06/30/2004   29.03        64.50        65.99        64.33        76.05

  07/30/2004   29.09        68.75        64.02        68.68        74.37

  08/30/2004   29.23        66.50        65.19        n/a          76.52

  09/30/2004   29.22        66.75        70.50        87.50        86.86

  10/30/2004   28.77        71.00        72.50        91.00        92.13

  11/30/2004   28.24        69.50        71.75        86.50        84.66

  12/29/2004   27.78        72.00        81.17        83.50        84.12
  ------------ ------------ ------------ ------------ ------------ ------------

Source: Russian Institute for Agricultural Market Studies (IKAR)

Prices are in rubles per kilogram.

# Policy

On January 11, the Russian Government published the resolutions that
renew the poultry quota and beef and pork tariff rate quotas (TRQs) for
2005. On February 3, Russia released the final documents that allow the
2005 import licenses to be distributed to Russian importers and trade to
begin. Please see GAIN report RS5002 for a full translation of the
resolutions.

The frozen beef and chilled beef TRQs were set at 430,000 MT and 27,500
MT, with the United States to receive a specific part of the frozen beef
TRQ (17,700 MT). The frozen beef TRQ was raised by 10,000 MT in 2005 and
the U.S. share was increased by 500 MT. The fresh/chilled beef TRQ
remains the same. However, since the detection of one case of BSE in
December 2003, the United States has been unable to export beef or
bovine products for human consumption to Russia.

The United States was allocated 53,800 MT of the 467,400 MT pork TRQ.
The pork TRQ was increase from 450,000 MT in 2004 and the U.S. share of
the pork TRQ was raised by 11,600 MT. An unexpected compromise between
Russian meat processors and meat producers was included in point 4 (f)
of the pork TRQ resolution. It requires the creation of an additional
proposal for pork trimmings in June 2005 to come into force in July
2005. Though the nature of this proposal is not clearly outlined, its
mention shows that Russian processors complaints about problems keeping
the low-priced pork trimmings inside the TRQ have been taken into
consideration. The final proposal might be a secondary TRQ for trimmings
with a lower in-quota duty, a removal of trimmings from the TRQ, or a
method for allowing processors to import trimmings using special
licenses.

Separating trimmings from the TRQ could be an important temporary market
for U.S. exporters. Currently, exporters are allowed to ship cutting fat
outside of the TRQ, but Russian processors would also like to import
trimmings. Trimmings are an important ingredient for sausage production,
but its current inclusion in the TRQ makes it relatively expensive for
processors.

Russian trade policy in general had a significant impact on the poultry
and meat markets during 2004. For complete details, reference GAIN
report RS4068.

## Table 3: Russian Meat Import Quota Volumes for 2005, MT 

  ----------------------- ----------------------- ------------ -----------
                          **Pork**                **Beef**     

                                                  **Frozen**   **Fresh**

  Total                   467,400                 430,000      27,500

  Including                                                    

  EU                      236,000                 339,700      27,000

  US                      53,800                  17,700       0

  Paraguay                1,000                   3            0

  Other                   176,600                 69,600       500
  ----------------------- ----------------------- ------------ -----------

Source: GOR Resolutions

# Marketing

Russia's sophisticated and competitive retail sector is booming thanks
to six straight years of strong economic expansion. According to
official sources, total retail turnover in 2003 was \$146 billion
(including \$68 billion for food retail turnover), although unofficial
estimates place total sales at least 50 percent above this level. It is
clear that the expanding market has caught the attention of retailers --
both local and foreign chains. Experts forecast growth will peak by
2012, so for U.S. exporters of food products for retail sale, the clock
is ticking down. As chains expand, quality becomes more important, an
advantage for U.S. products. The growing retail sector in Russia must
become a factor in U.S. exporter strategy as the traditional markets,
where most U.S. poultry is currently sold, slowly give way to large
retailers. This will require re-evaluating what products and packaging
will satisfy consumers\' demand for quality goods.

According to market experts, per capita monthly income in Russia will
keep growing and will reach \$600 in Russia and \$1,500 in Moscow by
2012. Per capita income in large Russian large cities will increase
twofold over the same period of time. This represents a large future
growth in consumption of food because of Russia's large population. For
more information about trends in retailing and the new marketing
challenges, please reference GAIN reports RS4317 and RS4318.

  ------------------- -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                  

  **Country**         **Russian                                                  
                      Federation**                                               

  **Commodity**       **Animal                                        (1000      
                      Numbers,                                        HEAD)      
                      Cattle**                                                   

                      2003           Revised    2004       Estimate   2005       Forecast

                      USDA Official  Post       USDA       Post       USDA       Post
                      \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                     \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                      01/2003               01/2004               01/2005
  Begin**                                                                        

  Total Cattle Beg.   23500          23500      22285      22285      20995      21100
  Stks                                                                           

  Dairy Cows Beg.     11700          11700      10970      10970      10640      10430
  Stks                                                                           

  Beef Cows Beg.      0              0          0          0          0          0
  Stocks                                                                         

  Production (Calf    8845           8845       8400       8400       8200       7950
  Crop)                                                                          

  Intra EC Imports    0              0          0          0          0          0

  Total Imports       9              9          10         10         10         10

  TOTAL Imports       9              9          10         10         10         10

  TOTAL SUPPLY        32354          32354      30695      30695      29205      29060

  Intra EC Exports    0              0          0          0          0          0

  Total Exports       8              8          5          5          5          5

  TOTAL Exports       8              8          5          5          5          5

  Cow Slaughter       1720           1720       1650       1700       1620       1600

  Calf Slaughter      0              0          0          0          0          0

  Other Slaughter     8000           8000       7785       7690       7380       7250

  Total Slaughter     9720           9720       9435       9390       9000       8850

  Loss                341            341        260        200        200        105

  Ending Inventories  22285          22285      20995      21100      20000      20100

  TOTAL DISTRIBUTION  32354          32354      30695      30695      29205      29060

  Calendar Yr. Imp.   0              0          0          0          0          0
  from U.S.                                                                      

  Calendar Yr. Exp.   0              0          0          0          0          0
  to U.S.                                                                        
  ------------------- -------------- ---------- ---------- ---------- ---------- ----------

  ------------------ -------------- ---------- ---------- ---------- ---------- ----------
  **PSD Table**                                                                 

  **Country**        **Russian                                                  
                     Federation**                                               

  **Commodity**      **Animal                                        (1000      
                     Numbers,                                        HEAD)      
                     Swine**                                                    

                     2003           Revised    2004       Estimate   2005       Forecast

                     USDA Official  Post       USDA       Post       USDA       Post
                     \[Old\]        Estimate   Official   Estimate   Official   Estimate
                                    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  **Market Year                     01/2003               01/2004               01/2005
  Begin**                                                                       

  TOTAL Beginning    17000          17000      17200      17200      17600      16500
  Stocks                                                                        

  Sow Beginning      3300           3300       3340       3340       3400       3450
  Stocks                                                                        

  Production (Pig    35000          35000      35800      35000      36700      36600
  Crop)                                                                         

  Intra EC Imports   0              0          0          0          0          0

  Total Imports      35             35         35         35         35         40

  TOTAL Imports      35             35         35         35         35         40

  TOTAL SUPPLY       52035          52035      53035      52235      54335      53140

  Intra EC Exports   0              0          0          0          0          0

  Total Exports      1              1          1          1          1          1

  TOTAL Exports      1              1          1          1          1          1

  Sow Slaughter      0              0          0          0          0          0

  OTHER SLAUGHTER    30600          30600      31000      31300      31900      31505

  Total Slaughter    30600          30600      31000      31300      31900      31505

  Loss               4234           4234       4434       4434       4434       4434

  Ending Inventories 17200          17200      17600      16500      18000      17200

  TOTAL DISTRIBUTION 52035          52035      53035      52235      54335      53140

  Calendar Yr. Imp.  0              0          0          0          0          0
  from U.S.                                                                     
  ------------------ -------------- ---------- ---------- ---------- ---------- ----------

  ------------------ -------------- ---------- ---------- ---------- ----------- ----------
  **PSD Table**                                                                  

  **Country**        **Russian                                                   
                     Federation**                                                

  **Commodity**      **Meat, Beef                                    (1000 MT    
                     and Veal**                                      CWE)(1000   
                                                                     HEAD)       

                     2003           Revised    2004       Estimate   2005        Forecast

                     USDA Official  Post       USDA       Post       USDA        Post
                     \[Old\]        Estimate   Official   Estimate   Official    Estimate
                                    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]

  **Market Year                     01/2003               01/2004                01/2005
  Begin**                                                                        

  Slaughter          9720           9720       9435       9390       9000        8850
  (Reference)                                                                    

  Beginning Stocks   0              0          0          0          0           0

  Production         1670           1670       1610       1590       1550        1550

  Intra EC Imports   0              0          0          0          0           0

  Total Imports      650            650        650        660        650         700

  TOTAL Imports      650            650        650        660        650         700

  TOTAL SUPPLY       2320           2320       2260       2250       2200        2250

  Intra EC Exports   0              0          0          0          0           0

  Total Exports      5              5          5          5          5           5

  TOTAL Exports      5              5          5          5          5           5

  Human Dom.         2270           2270       2205       2195       2150        2200
  Consumption                                                                    

  Other Use, Losses  45             45         50         50         45          45

  TOTAL Dom.         2315           2315       2255       2245       2195        2245
  Consumption                                                                    

  Ending Stocks      0              0          0          0          0           0

  TOTAL DISTRIBUTION 2320           2320       2260       2250       2200        2250

  Calendar Yr. Imp.  0              0          0          0          0           0
  from U.S.                                                                      

  Calendar Yr. Exp.  0              0          0          0          0           0
  to U.S.                                                                        
  ------------------ -------------- ---------- ---------- ---------- ----------- ----------

  ------------------ -------------- ---------- ---------- ---------- ----------- ----------
  **PSD Table**                                                                  

  **Country**        **Russian                                                   
                     Federation**                                                

  **Commodity**      **Meat,                                         (1000 MT    
                     Swine**                                         CWE)(1000   
                                                                     HEAD)       

                     2003           Revised    2004       Estimate   2005        Forecast

                     USDA Official  Post       USDA       Post       USDA        Post
                     \[Old\]        Estimate   Official   Estimate   Official    Estimate
                                    \[New\]    \[Old\]    \[New\]    \[Old\]     \[New\]

  **Market Year                     01/2003               01/2004                01/2005
  Begin**                                                                        

  Slaughter          30600          30600      31000      31300      31900       31505
  (Reference)                                                                    

  Beginning Stocks   0              0          0          0          0           0

  Production         1710           1710       1740       1725       1790        1760

  Intra EC Imports   0              0          0          0          0           0

  Total Imports      620            620        500        475        500         500

  TOTAL Imports      620            620        500        475        500         500

  TOTAL SUPPLY       2330           2330       2240       2200       2290        2260

  Intra EC Exports   0              0          0          0          0           0

  Total Exports      1              1          1          1          1           1

  TOTAL Exports      1              1          1          1          1           1

  Human Dom.         2245           2245       2179       2139       2224        2194
  Consumption                                                                    

  Other Use, Losses  84             84         60         60         65          65

  TOTAL Dom.         2329           2329       2239       2199       2289        2279
  Consumption                                                                    

  Ending Stocks      0              0          0          0          0           0

  TOTAL DISTRIBUTION 2330           2330       2240       2200       2290        2280

  Calendar Yr. Imp.  0              0          0          0          0           0
  from U.S.                                                                      

  Calendar Yr. Exp.  0              0          0          0          0           0
  to U.S.                                                                        
  ------------------ -------------- ---------- ---------- ---------- ----------- ----------

  ------------ ---------------- -- ---------- ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
  **Russian                                                                                                                                                              
  Pork                                                                                                                                                                   
  Imports**                                                                                                                                                              

                                                         **2004**                                                                                                        

               **Quantity          **2002**   **2003**   **Jan.**   **Feb.**   **Mar**   **Apr**   **May**   **Jun**   **Jul**   **Aug**   **Sep**   **Oct**   **Nov**   **YTD**
               (MT)**                                                                                                                                                    

  **0203**     PORK,FRESH OR       602,010    533,871    17,654     14,212     40,723    44,077    38,225    38,176    31,318    34,972    42,460    36,548    38,279    376,646
               FROZEN                                                                                                                                                    

  ** **                                                                                                                                                                   

  **020321**   FROZEN CUT          301,929    266,729    9,651      5,740      20,427    26,310    26,485    24,040    20,339    20,276    26,272    22,041    20,526    222,109
               BONELESS                                                                                                                                                  

  **020329**   FROZEN CARCASSES    238,026    228,899    7,690      7,699      16,366    11,681    8,880     11,318    8,152     11,488    12,844    12,221    10,893    119,231

  **020311**   FROZEN              55,756     29,632     294        614        3,550     4,946     2,365     2,515     2,507     2,827     3,002     1,661     5,501     29,781
               CUTS+BONES                                                                                                                                                

  **020322**   FRESH CARCASSES     4,856      6,786      20         120        261       1,005     377       186       200       140       170       395       1,111     3,984

  **020319**   FRESH CUTS          1,358      1,805      0          39         119       135       118       118       120       242       172       230       250       1,542
               BONELESS                                                                                                                                                  

  **020312**   FRESH CUTS+BONES    85         20         NA         NA         NA        NA        NA        NA        NA        NA        NA        NA        NA        NA

                                                                                                                                                                         

               **Value (Million    2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
               USD)**                                                                                                                                                    

  **0203**     PORK,FRESH OR       672        651        24         17         51        58        54        53        44        48        60        53        53        514
               FROZEN                                                                                                                                                    

  ** **                                                                                                                                                                   

  **020321**   FROZEN CUT          366        369        15         8          29        38        41        36        31        31        41        35        30        336
               BONELESS                                                                                                                                                  

  **020329**   FROZEN CARCASSES    239        237        8          8          17        13        10        13        9         13        14        14        13        132

  **020311**   FROZEN              59         34         0          1          4         6         3         3         3         4         4         2         7         37
               CUTS+BONES                                                                                                                                                

  **020322**   FRESH CARCASSES     7          8          0          0          0         1         1         0         0         0         0         1         2         6

  **020319**   FRESH CUTS          2          3          0          0          0         0         0         0         0         0         0         0         0         3
               BONELESS                                                                                                                                                  

  **020312**   FRESH CUTS+BONES    0          0          0          0          0         0         0         0         0         0         0         0         0         0

                                                                                                                                                                         

  **0203**     **PORK,FR./FR.      2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
               Qty. (MT)**                                                                                                                                               

  **1**        Brazil -            349,799    312,693    15,475     4,047      18,282    21,356    27,773    28,111    22,008    23,810    31,986    24,827    13,629    231,302

  **2**        Germany -           29,652     16,351     47         611        1,572     2,066     708       1,118     1,207     1,411     906       2,289     5,308     17,243

  **3**        Denmark -           41,437     20,440     97         887        3,063     2,616     1,735     1,586     1,809     1,904     2,227     1,649     3,589     21,161

  **4**        France -            16,301     8,111      0          587        1,703     1,918     500       782       583       560       917       1,363     2,693     11,605

  **5**        United States -     16,018     2,734      173        52         659       1,854     869       1,582     1,355     1,339     696       774       2,403     11,756

  **6**        Netherlands -       7,644      4,134      0          110        1,258     1,691     469       354       353       509       496       694       2,259     8,194

  **7**        China -             67,519     43,757     432        374        1,251     3,194     3,065     2,474     1,568     1,636     1,992     1,010     1,964     18,960

  **8**        Poland -            17,153     78,466     850        5,007      9,086     4,785     447       180       217       348       480       1,383     1,767     24,549

  **9**        Canada -            26,446     14,041     0          0          150       149       242       96        74        50        88        223       1,108     2,180

  **10**       Spain -             1,900      2,785      0          25         67        201       66        236       278       236       333       308       923       2,672

                                                                                                                                                                         

  **0203**     **Mkt. Share (%     2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
               of Qty.)**                                                                                                                                                

  **1**        Brazil -            58.1%      58.6%      87.7%      28.5%      44.9%     48.5%     72.7%     73.6%     70.3%     68.1%     75.3%     67.9%     35.6%     61.4%

  **2**        Germany -           4.9%       3.1%       0.3%       4.3%       3.9%      4.7%      1.9%      2.9%      3.9%      4.0%      2.1%      6.3%      13.9%     4.6%

  **3**        Denmark -           6.9%       3.8%       0.5%       6.2%       7.5%      5.9%      4.5%      4.2%      5.8%      5.4%      5.2%      4.5%      9.4%      5.6%

  **4**        France -            2.7%       1.5%       0.0%       4.1%       4.2%      4.4%      1.3%      2.0%      1.9%      1.6%      2.2%      3.7%      7.0%      3.1%

  **5**        United States -     2.7%       0.5%       1.0%       0.4%       1.6%      4.2%      2.3%      4.1%      4.3%      3.8%      1.6%      2.1%      6.3%      3.1%

  **6**        Netherlands -       1.3%       0.8%       0.0%       0.8%       3.1%      3.8%      1.2%      0.9%      1.1%      1.5%      1.2%      1.9%      5.9%      2.2%

  **7**        China -             11.2%      8.2%       2.4%       2.6%       3.1%      7.2%      8.0%      6.5%      5.0%      4.7%      4.7%      2.8%      5.1%      5.0%

  **8**        Poland -            2.8%       14.7%      4.8%       35.2%      22.3%     10.9%     1.2%      0.5%      0.7%      1.0%      1.1%      3.8%      4.6%      6.5%

  **9**        Canada -            4.4%       2.6%       0.0%       0.0%       0.4%      0.3%      0.6%      0.3%      0.2%      0.1%      0.2%      0.6%      2.9%      0.6%

  **10**       Spain -             0.3%       0.5%       0.0%       0.2%       0.2%      0.5%      0.2%      0.6%      0.9%      0.7%      0.8%      0.8%      2.4%      0.7%
  ------------ ---------------- -- ---------- ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------

  ------------- -------------- ---------- ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
  **Russian                                                                                                                                                          
  Beef                                                                                                                                                               
  Imports**                                                                                                                                                          

                                                     **2004**                                                                                                        

                **Quantity     **2002**   **2003**   **Jan.**   **Feb.**   **Mar**   **Apr**   **May**   **Jun**   **Jul**   **Aug**   **Sep**   **Oct**   **Nov**   **YTD**
                (MT)**                                                                                                                                               

  **0202**      BEEF, FROZEN   469,141    495,031    10,313     10,111     30,935    35,825    40,437    41,184    50,806    53,818    54,817    35,991    55,732    419,970

  ** **                                                                                                                                                               

  ** 020230**   CUTS BONELESS  325,928    387,030    8,763      6,918      26,584    31,364    36,444    36,194    43,388    47,091    48,437    30,516    49,837    365,537

  ** 020210**   CARC, WH/HALF  96,397     95,827     1,357      2,938      4,351     4,460     3,990     4,982     6,769     6,719     6,369     4,827     4,241     51,003

  ** 020220**   CUTS W BONE    46,816     12,174     192        255        0         0         3         8         649       9         12        648       1,654     3,429

  ** **                                                                                                                                                               

  **0201**      BEEF FR, CH    35,459     10,015     0          423        1,186     1,874     1,473     1,533     2,009     2,110     1,991     2,510     2,123     17,232

  ** **                                                                                                                                                               

  ** 020130**   CUTS BONELESS  34,212     9,891      0          405        1,185     1,872     1,454     1,494     1,957     1,949     1,784     2,374     2,121     16,596

  ** 020120**   CUTS W BONE    1,229      124        0          18         1         2         19        38        39        147       117       60        2         443

  ** 020110**   CARC,WH/HALF   18         0          0          0          0         0         0         0         14        14        90        75        0         193

                                                                                                                                                                     

                **Value        2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
                (Million                                                                                                                                             
                USD)**                                                                                                                                               

  **0202**      BEEF, FROZEN   540        602        13         15         41        49        55        57        71        73        74        51        70        569

  ** **                                                                                                                                                               

  ** 020230**   CUTS BONELESS  369        465        11         10         33        41        48        48        57        61        62        40        60        470

  ** 020210**   CARC, WH/HALF  127        125        2          5          8         8         7         9         13        13        12        9         8         96

  ** 020220**   CUTS W BONE    44         12         0          0          0         0         0         0         1         0         0         1         2         3

  ** **                                                                                                                                                               

  **0201**      BEEF FR, CH    49         14         0          1          2         3         2         2         3         3         3         4         3         26

  ** **                                                                                                                                                               

  ** 020130**   CUTS BONELESS  48         13         0          1          2         3         2         2         3         3         3         3         3         25

  ** 020120**   CUTS W BONE    2          0          0          0          0         0         0         0         0         0         0         0         0         1

  ** 020110**   CARC,WH/HALF   0          0          0          0          0         0         0         0         0         0         0         0         0         0

                                                                                                                                                                     

  **0202**      **BEEF, FROZEN 2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
                Qty. (MT)**                                                                                                                                          

  **1**         Brazil -       27,087     90,503     4,502      1,739      6,407     3,762     10,378    12,823    13,904    18,809    19,526    10,090    24,953    126,894

  **2**         Argentina -    0          22,020     367        795        2,093     1,432     4,552     5,844     9,937     11,072    10,173    7,021     11,093    64,379

  **3**         Ukraine -      128,578    144,904    1,732      4,453      6,682     7,552     7,195     7,567     9,624     8,970     8,494     6,243     4,898     73,410

  **4**         Ireland -      61,943     58,310     1,471      484        2,040     3,467     2,499     3,046     2,330     2,596     3,445     3,451     3,777     28,605

  **5**         Paraguay -     3,790      1,768      153        131        109       53        673       1,972     1,437     2,362     3,887     1,852     2,666     15,296

  **0201**      **BEEF FRESH,                                                                                                                                         
                CHILLED Qty.                                                                                                                                         
                (MT)**                                                                                                                                               

  **1**         Germany -      32,189     9,229      0          404        1,109     1,656     1,379     1,316     1,622     1,687     1,584     1,688     1,429     13,875

  **2**         Netherlands -  272        316        0          0          38        97        32        97        55        58        19        57        271       724

  **3**         Lithuania -    15         9          0          18         0         0         18        55        70        206       173       203       233       976

  **4**         Brazil -       0          25         0          0          0         0         0         0         45        24        27        451       125       672

  **5**         Belgium -      251        39         0          0          0         0         0         38        77        77        77        19        38        326

                                                                                                                                                                     

  **0202**      **Mkt. Share   2002       2003       Jan.       Feb.       Mar       Apr       May       Jun       Jul       Aug       Sep       Oct       Nov       YTD
                (% of Qty.)**                                                                                                                                        

  **1**         Brazil -       5.8%       18.3%      43.7%      17.2%      20.7%     10.5%     25.7%     31.1%     27.4%     34.9%     35.6%     28.0%     44.8%     30.2%

  **2**         Argentina -    0.0%       4.4%       3.6%       7.9%       6.8%      4.0%      11.3%     14.2%     19.6%     20.6%     18.6%     19.5%     19.9%     15.3%

  **3**         Ukraine -      27.4%      29.3%      16.8%      44.0%      21.6%     21.1%     17.8%     18.4%     18.9%     16.7%     15.5%     17.3%     8.8%      17.5%

  **4**         Ireland -      13.2%      11.8%      14.3%      4.8%       6.6%      9.7%      6.2%      7.4%      4.6%      4.8%      6.3%      9.6%      6.8%      6.8%

  **5**         Paraguay -     0.8%       0.4%       1.5%       1.3%       0.4%      0.1%      1.7%      4.8%      2.8%      4.4%      7.1%      5.1%      4.8%      3.6%

  **0201**                                                                                                                                                            

  **1**         Germany -      90.8%      92.2%      0.0%       95.6%      93.5%     88.4%     93.6%     85.9%     80.7%     79.9%     79.6%     67.3%     67.3%     80.5%

  **2**         Netherlands -  0.8%       3.2%       0.0%       0.0%       3.2%      5.2%      2.2%      6.3%      2.7%      2.8%      1.0%      2.3%      12.8%     4.2%

  **3**         Lithuania -    0.0%       0.1%       0.0%       4.3%       0.0%      0.0%      1.2%      3.6%      3.5%      9.8%      8.7%      8.1%      11.0%     5.7%

  **4**         Brazil -       0.0%       0.2%       0.0%       0.0%       0.0%      0.0%      0.0%      0.0%      2.2%      1.1%      1.4%      18.0%     5.9%      3.9%

  **5**         Belgium -      0.7%       0.4%       0.0%       0.0%       0.0%      0.0%      0.0%      0.025     0.038     0.036     0.039     0.008     0.018     1.9%
  ------------- -------------- ---------- ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------