Required Report - public distribution

**Date:** 9/18/2006

**GAIN Report Number:** RS6050

RS6050

**Russian Federation**

**Poultry and Products**

**Annual Report**

**2006**

**Approved by:**

![](media/image1.wmf)Kimberly Svec

American Embassy, Moscow

**Prepared by:**

Erik Hansen and Mikhail Maksimenko

**Report Highlights:**

From January-July 2006, Russian poultry imports dropped to 691,300 MT
compared to 702,600 MT during the same period in 2005. Domestic poultry
production will increase 20 percent in 2006 and is expected to grow
another 18 percent in 2007. Consumption of poultry meat is now on rise
after a substantial drop following several outbreaks of avian influenza.
Poultry prices stabilized with consumption growth but are still lower
than a year ago. Domestic poultry producers continue to call for import
restrictions reduce competition.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 3](#production)

[Consumption 3](#consumption)

[Trade 4](#trade)

[Poultry prices 5](#poultry-prices)

[Table 1. Moscow Wholesale Poultry Meat Prices, April 2003 --August 2006
5](#table-1.-moscow-wholesale-poultry-meat-prices-april-2003-august-2006)

[Stocks 5](#stocks)

[Policy 6](#policy)

[Cancellation of all existing permits for poultry imports
7](#cancellation-of-all-existing-permits-for-poultry-imports)

[Voluntary decision to reduce poultry meat imports by 30 percent
7](#voluntary-decision-to-reduce-poultry-meat-imports-by-30-percent)

[Draft of a new technical regulation may ban production of food products
(cutlets, sausage, MDM) from frozen poultry
7](#draft-of-a-new-technical-regulation-may-ban-production-of-food-products-cutlets-sausage-mdm-from-frozen-poultry)

[Marketing 8](#marketing)

[Domestic producers lobby poultry import restriction
8](#domestic-producers-lobby-poultry-import-restriction)

[VPSS - no avian influenza in Russia
9](#vpss---no-avian-influenza-in-russia)

[PS&D Tables 10](#psd-tables)

# Executive Summary

In the first seven months of 2006, poultry imports dropped to 691,300
tons from 702,600 tons, compared to the same period last year. However,
due to higher prices, the value of imports in the first seven months of
2006 totaled \$467 million, up from \$441.1 million a year earlier.

Meat and poultry production increased 3.9 percent to 3.7 million metric
tons from January - July 2006, in comparison with the same period in
2005. Broiler production in 2005 was adjusted in accordance with new
poultry production statistics. Production in 2006 will increase 20
percent, and is expected to grow 18 percent in 2007. Turkey production
is also growing as new turkey facilities are being constructed.

No avian influenza cases have been reported in Russia for more than four
weeks, according to Russian Service for Veterinary and Phytosanitary
Surveillance officials.

Consumption of poultry meat in Russia is on the rise after a drop
following much-publicized outbreaks of avian influenza at the end of
2005 and in the beginning of 2006. Poultry meat consumption increased 4
percent in June 2006 compared to the previous month.

# Production

Meat and poultry production increased 3.9 percent to 3.7 million metric
tons from January - July 2006, compared to the same time period last
year. Egg production increased 2.8 percent to 22.6 billion eggs.

Broiler production in 2005 was adjusted in accordance with new poultry
production statistics. Production in 2006 is expected to increase 20
percent and will continue to grow an additional 18 percent in 2007.
Turkey production is also growing as new turkey facilities are being
built and because turkey meat prices are much higher than broiler prices
in Russia.

A new system of poultry production has been introduced in some regions
of the Russian Federation to overcome growing agrarian crises in those
regions. Currently, a mini-poultry facility equipped with the up-to-date
European equipment is being constructed in Uliyanovsk oblast. One person
is servicing the mini-farm as it is completely automated and
computerized beginning from climate support to manure removal. It is
expected to produce about 700 metric tons of poultry meat annually.
Broilers will be slaughtered at 42 days of age weighing in at an average
of 2.5 kilograms. The expected weight gain is 60 grams per day.
Twenty-five sets of such mini-farms will be built in the region. The
Ministry of Agriculture is planning to apply this approach throughout
Russia.

# Consumption

Consumption of poultry meat in Russia is on the rise after a drop
following much-publicized outbreaks of avian influenza at the end of
2005 and in the beginning of 2006. Poultry meat consumption increased 4
percent in June 2006 compared to the previous month. According to the
International Poultry Development Program and the Russian Poultry Union,
94 percent of Russians regularly consume poultry. According to their
research, only 12 percent of Russians reduced consumption of poultry
meat following avian influenza outbreaks and only 3 percent stopped
eating poultry altogether. At the same time, 6 percent of Russians said
they had increased poultry intake over the last year. An overwhelming
number of those polled said they were fully confident in the safety of
poultry meat sold in Russian stores. A total of 69 percent of the
respondents said they had begun paying more attention to preventive
measures against avian influenza while 40 percent said they closely
observed the necessary procedures for preparing and storing poultry
meat.

Avian influenza outbreaks took place in Russia in July 2005, which led
to a significant reduction in poultry meat consumption. The main reason
for the sharp drop in consumption following these outbreaks was the way
that the Russian media ran with it. Some 80 percent of those polled said
Russian newspapers, radio stations and television networks devoted too
much attention to the outbreaks. Positive trends have returned to the
poultry meat market as a result of perceived strengthening of veterinary
control and a significant drop in the number of publications devoted to
avian influenza. The number of media reports on avian influenza in June
2006 had dropped dramatically compared to March 2006, which is
considered to be the "peak period" of the avian influenza scare.
Rosptitsesoyuz President Vladimir Fisinin, who also serves as First Vice
President of the Russian Agriculture Academy, is quoted as saying that,
"the data received proves that the crisis caused by avian influenza has
been overcome and the situation has been fully resolved."

Russian consumers are not used to eating turkey meat since there was no
domestic production until recently. Many companies started raising
turkeys and they have been advertising their product heavily in order to
attract customers. This advertising campaign has been a success. Turkey
meat prices are high (250 rubles/kg of turkey breast vs. 130 rubles/kilo
of broiler breast) compared to chicken prices, but local producers are
doing very well selling their products.

# Trade

According to the Russian Federal Customs Service (FTS), in the first
seven months of 2006 compared to the same period last year, poultry
imports dropped to 691,300 tons from 702,600 tons. However, due to
higher prices the value of imports in the first seven months of 2006
totaled \$467 million, up from \$441.1 million a year earlier. Russia
imported 10.9 percent more red meat in the first seven months of 2006
compared to the same period in 2005. According to FTS figures, 681,700
tons of meat valued at \$1.214 billion were imported during the first
seven months of 2006, compared to 557,600 tons worth \$778.1 million a
year earlier.

# Poultry prices 

Wholesale poultry prices decreased year-on-year basis in August 2006 for
both domestic and imported product, down 3 percent for domestic frozen
breasts to almost 30 percent on imported frozen carcasses. After the
Russian Federation took counter measures (see below), prices started
rising in May 2006 before once again going down in August. Recently,
domestic producers have been competing more and more with each other
instead of with their traditional adversaries, poultry importers.

## Table 1. Moscow Wholesale Poultry Meat Prices, April 2003 --August 2006 

+--------+------+--------+--------+--------+--------+--------+--------+
| **     | **E  | **Do   |        |        | **Im   |        |        |
| Date** | xch. | mestic |        |        | ported |        |        |
|        | R    | chi    |        |        | chi    |        |        |
|        | ate, | cken** |        |        | cken** |        |        |
|        | RU/  |        |        |        |        |        |        |
|        | \$** |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
|        |      | **     | **     | **     | **     | **     | **     |
|        |      | Frozen | Frozen | Frozen | Frozen | Frozen | Frozen |
|        |      | carca  | b      | leg    | carca  | b      | leg**  |
|        |      | sses** | reast, | quar   | sses** | reast, |        |
|        |      |        | bone   | ters** |        | bone   | **Quar |
|        |      |        | less** |        |        | less** | ters** |
+--------+------+--------+--------+--------+--------+--------+--------+
| 04/3   | 3    | 41.77  | 55.67  | 44.50  | 41.90  | 56.38  | 34.42  |
| 0/2003 | 1.10 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 06/3   | 3    | 49.07  | 59.32  | 49.50  | 48.27  | 73.08  | 39.77  |
| 0/2003 | 0.35 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 09/3   | 3    | 59.96  | 108.00 | 61.09  | 58.58  | 107.77 | 45.45  |
| 0/2003 | 0.61 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 12/3   | 2    | 56.02  | 93.33  | 60.63  | 55.65  | 88.32  | 45.39  |
| 0/2003 | 9.25 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 03/3   | 2    | 54.07  | 84.50  | 52.50  | 52.51  | 80.30  | 44.96  |
| 1/2004 | 8.49 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 06/3   | 2    | 52.80  | 82.50  | 50.32  | 45.94  | 84.45  | 42.94  |
| 0/2004 | 9.03 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 09/3   | 2    | 49.62  | 90.25  | 47.82  | 44.20  | 89.77  | 43.76  |
| 0/2004 | 9.22 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 12/2   | 2    | 50.17  | 90.08  | 52.24  | 49.34  | 89.98  | 42.28  |
| 9/2004 | 7.78 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 03/3   | 2    | 61.42  | 85.00  | 56.10  | 63.17  | 87.33  | 54.66  |
| 0/2005 | 7.83 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 06/3   | 2    | 69.35  | 93.00  | 67.13  | 68.56  | 93.75  | 56.60  |
| 0/2005 | 8.67 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 09/3   | 2    | 65.19  | 98.00  | 63.07  | 66.64  | 107.38 | 60.14  |
| 0/2005 | 8.50 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 10/3   | 2    | 62.90  | 96.75  | 65.52  | 62.76  | 103.17 | 55.67  |
| 0/2005 | 8.42 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 11/3   | 2    | 59.97  | 96.50  | 58.91  | 60.81  | 98.60  | 51.08  |
| 0/2005 | 8.73 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 12/3   | 2    | 53.64  | 95.00  | 57.50  | 56.27  | 97.08  | 48.93  |
| 0/2005 | 8.75 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 01/3   | 2    | 52.90  | 94.92  | 54.57  | 60.86  | 98.21  | 46.08  |
| 0/2006 | 8.02 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 02/2   | 2    | 49.39  | 94.82  | 57.00  | 57.29  | 100.51 | 42.88  |
| 8/2006 | 8.16 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 03/3   | 2    | 48.56  | 91.82  | 53.42  | 52.54  | 102.38 | 43.23  |
| 0/2006 | 7.76 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 04/3   | 2    | 46.71  | 94.77  | 52.03  | 46.88  | 100.79 | 44.74  |
| 0/2006 | 7.47 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 05/3   | 2    | 47.01  | 94.02  | 55.50  | 49.09  | 100.84 | 46.80  |
| 0/2006 | 7.07 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 06/3   | 2    | 47.51  | 95.60  | 56.33  | 46.51  | 94.83  | 46.21  |
| 0/2006 | 7.08 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 08/0   | 2    | 51.16  | 96.80  | 56.00  | 46.50  | 91.42  | 43.36  |
| 3/2006 | 6.76 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+
| 08/3   | 2    | 54.94  | 94.82  | 53.33  | 48.08  | 90.60  | 43.10  |
| 1/2006 | 6.74 |        |        |        |        |        |        |
+--------+------+--------+--------+--------+--------+--------+--------+

Source: Institute of Agrarian Market Research (IKAR)

Prices on the U.S. chicken leg quarters

April, 2006 -- RUR 42.93/kilo

May, 2006 - RUR 44.54/kilo

June, 2006 - RUR 44.50/kilo

July, 2006 RUR 40.60/kilo

August, 2006 RUR 39.90/kilo

# Stocks

Poultry stocks this spring were large due to a sharp reduction in
consumption caused by avian influenza outbreaks. As a result, the
Ministry of Agriculture began supporting poultry shipment restrictions
-- cancellation of poultry veterinary import permits and pressuring
poultry importers to "voluntarily" cut their imports by 30 percent.

# Policy 

The Russian official newspaper, Rossiiskaya Gazeta, published on
09.12.2006 a Resolution of the Government of the Russian Federation #533
of September 8, 2006 "On Introduction of Changes to the Resolution of
the Government of the Russian Federation #733 of December 5, 2005." This
new Resolution calls for reallocating quotas of those countries with
quota if/when they experience disease outbreaks and/or when countries
with quota do not have enough product to export to Russia. Resolution
#533 decrees to add to Paragraphs 1 and 3 of the Resolution "On
additional measures to regulate the import of beef, pork and poultry in
2006-2009" the following: After wording "due to unfavorable epizootic
situation the following wording, "as well as in the case of continuation
for more than 3 months in a year of restrictions for exports introduced
previously by a country-supplier (union of countries) and (or) absence
of required volume of a commodity at a market of the country-supplier
(union of countries). The present resolution enters into force within
one month following its official publication.

The Resolution may have two side effects;

-   It gives more reasons to change TRQ country allocation (Ref RS6018)
    because of the epizootic situation in the exporting country;

-   Leaves it up to the Russian government to decide when an exporting
    country does not have enough volume.

## 

The above mentioned Resolution was developed in a working group session
that is part of an interagency commission on Protective Measures in
Foreign Trade that provides recommendations to Russia\'s customs and
tariffs policy. The first step will be redistributing a large part of
the European Union's quota in 2006 to other countries, mainly Brazil.
The reason for this move was that poultry diseases were registered in a
number of European countries. In addition, the European quota for
poultry meat was never filled and companies had to import poultry from
other countries (i.e. Brazil) at high duties set above the quota for
imports. About 50,000 metric tons of Brazilian poultry meat has been
imported to Russia at higher duties in the first half of 2006 alone.

The group also discussed a proposal on the method for distributing
quotas on poultry meat in 2007. The decision is stipulating that the
volume of meat imported in 2005 (not 2006) should be used to determine
the share quotas given to importing companies. It was also recommended
not to use the volume of poultry imported outside of the quota as has
been done in previous years. Meat market analysts have stated that
Russia is reacting to the current market situation and is looking to
support domestic producers. When demand for poultry meat fell in spring
2006 due to avian influenza outbreaks, importing companies voluntarily
decided to reduce imports by 30 percent. The Ministry of Agriculture
loudly supported this move because it enabled the market to remain
relatively stable and kept a number of Russian poultry plants from going
bankrupt.

The distribution of poultry import quotas in Russia is currently done on
the basis of the so-called historical principle, that is, a company\'s
share in the quota is determined in proportion to its share in imports
over the previous year. Therefore, the reduction in imports by companies
that voluntarily cut deliveries led to a drop in their share in the
quota for 2007. According to Minister of Agriculture Gordeyev, \"An
agreement was reached that stipulates that the share of importing
companies in the quota for 2007 will be retained regardless of the
volume they actually import this year." Thus, support will be provided
to companies that voluntarily reduced poultry meat imports by 30 percent
in the spring of 2006 to lessen the pressure on the Russian market and
to protect domestic producers.

To date, the methodology for calculating poultry import quotas for 2007
has not been officially announced. Market analysts are concerned that
whatever methodology used could seriously complicate the situation of
the Russian meat market toward the end of this year and lead to a
collapse in prices. The delay could encourage companies (who are afraid
that their share of the 2007 quota will decrease) to use up the full
quota for this year, which could sharply increase supply and push down
prices. Domestic producers would be the first to suffer.

According to some government sources, the draft resolution changing the
methodology for calculating poultry quotas in 2007 is now being cleared
by government agencies and should be submitted to the government by the
end of September for final approval. Under the resolution regulating
poultry imports in 2006, the quota for 2007 will be 1.131 million tons,
including 841,300 tons for the United States, 220,600 tons for the
European Union, 5,000 tons for Paraguay and 63,900 tons for other
countries.

## Cancellation of all existing permits for poultry imports

On April 27 the Russian Veterinary and Phytosanitary Surveillance
Service (VPSS) issued a resolution that canceled all existing permits
for poultry imports and established a new licensing scheme due to claims
of "repeated violations of Russian import regulations by exporters." The
new mechanism also consolidated the offices authorized to issue new
permits from the regional level to so-called zone offices. In addition,
VPSS set a deadline of May 8 for product being shipped from the
originating country using the old permits. This Resolution created
uncertainty in the market, which led to a decrease in poultry imports.

### Voluntary decision to reduce poultry meat imports by 30 percent 

On April 11, 2006, Russian importers decided to voluntarily reduce
imports of poultry meat by 30 percent, due to reduced demand for poultry
meat caused by avian influenza fears. At that time, demand for poultry
meat in Russia declined 20-25 percent compared to six months earlier.
The Ministry of Agriculture stated that the reduction in supplies of
imported poultry meat would not disrupt the balance in the domestic
market. The decision of the private sector to restrict purchases of
imported poultry meat was meant to support domestic producers. On
September 15, 2006, the Ministry of Economy Development and Trade (MEDT)
officials distributed leftover volumes of beef, pork and poultry quotas
as of August 1, 2006, on the bases of requests by companies that got
their licenses to import beef, pork and poultry. In accordance with the
data, the leftover poultry quota was only 4,400 metric tons between 143
companies proportional to their 2005-year statistics. This "leftover" is
much less than the 30 percent voluntary cut in poultry meat imports.

# Draft of a new technical regulation may ban production of food products (cutlets, sausage, MDM) from frozen poultry 

The Russian government is currently reviewing a draft of a new technical
regulation, which would significantly elevate import requirements of
poultry meat and processed poultry products. The Russian Poultry Union
(RPU) insists that Russia should ban production of all food products
(cutlets, sausage, MDM) made from (imported) frozen poultry. The RPU is
comprised of domestic poultry factories that produce mostly
fresh/chilled poultry. The text of the draft will soon passed to the
Ministry of Industry and Energy for review. The draft technical
regulation allows only chilled meat to be used for processing. If
approved, the change would affect poultry storage conditions at
factories, feeding facilities, meat storage and processing. Market
players believe this would have a strong impact on poultry meat imports
leading to an immediate 10 percent increase in poultry prices. According
to meat processing experts, frozen meat accounts for about 95 percent of
all raw material used by meat processors. Domestic chilled poultry is
much more expensive than imported frozen poultry so the new requirement
if approved would significantly increase production costs.

# Marketing

Transnational company Ideal Poultry House (IPH) plans to invest 875
million rubles to build a large poultry facility in Uliyanovsk oblast.
The Belgian Fortee Bank will finance the project. Ideal Poultry House
was founded in Belgium with shareholders from Hungary, Belgium, Denmark,
Holland, Luxemburg and France.

German company Lomann Tierzucht GMBH (LT) that supplied one-day chicks
for many Ural region poultry farms refused to cooperate with state-owned
farms. The company lost 8.8 million rubles after their joint venture
with a state-owned Russian partner fell apart after the Russian partner
filed for bankruptcy. They will have stated that they will only do
business with private companies in the future.

Eurodon Company is building turkey farm operations in Rostov-on-Don
(Lower Volga region). Roughly 63,000 metric tons of turkey meat will be
produced and processed there according to recent reports. An Israeli
company, M.A.D. Developing Agricultural Projects Limited, will provide
the technology for production and processing.

Russia banned imports of poultry meat from the Netherlands in early
August 2006 after low-pathogenic bird flu virus H7 was discovered. In
accordance with a Memorandum on Veterinary Cooperation between Russia
and the EU, the Netherlands cut off exports of chicken meat to Russia
and sent an official notification about the discovery of the disease and
measures being taken to eliminate it. Russia agreed to accept imports of
poultry meat and other poultry products shipped from the Netherlands
before August 21. Products shipped after that date would not be allowed
into Russia. The restrictions concern live birds, incubator eggs,
poultry meat and all types of poultry-related equipment.

# Domestic producers lobby poultry import restriction 

Domestic producers continue to push the Russian government to limit
competition by applying import restrictions. The Russian Poultry Union
organized a rally in the center of Moscow this past summer demanding
protective measures be enacted by the Russian government. It prepared an
open letter to Russian President Putin that was signed at the rally and
later published in Russian newspapers. Below is the content of the
letter:

Dear Mr. Putin,

The most scientific and technologically advanced sector of Russia's
agriculture, poultry production, is currently facing the threat of
extinction. This may be a serious blow to the food safety of the country
and can shed doubt on the implementation of the national project
"Development of the Agro-Industrial Complex."

This situation was the result of:

-   An unjustified annual increase in imports of chicken meat in spite
    of the rapid growth in domestic production. Poultry producers are
    the only people in Russia's agriculture that managed to double
    output in 1998! The annual increase in 2005 came to 17% (184,000
    tons). In first quarter of this year it has already exceeded 53,000
    tons! We have much to be proud of.

-   Frightening coverage in the mass media, including government-run
    editions, of the artificial threat of avian influenza, which is
    leading to a decline in demand on poultry and eggs in the country.

-   Growing illegal imports of chicken through the Special Economic Zone
    in Kaliningrad region.

-   Dumping of imports.

All this is leading to overstocking of unsold products, a reduction in
factory prices (by 25 percent) and as a result to losses and smaller
output volumes as well as unemployment.

Therefore, the market is cleared for low-quality and often health
threatening imported leg quarters and protein substitutes like soy
beans, social tension is built up because millions of rural residents
involved in agriculture and adjacent sectors are made redundant.

There is no appealing climate in Russia's agriculture for investments!

Continues concessions and the betrayal of domestic agricultural
interests at WTO accession talks are becoming a serious threat to the
industry. We, producers, people who are involved in poultry production
in Russia appeal to you, the guarantor of Russian Federation
Constitution and request your assistance in averting the demise of an
entire agricultural sector in Russia and in protection national
interests! End Letter.

### VPSS - no avian influenza in Russia

No avian influenza cases have been reported in Russia in more than four
weeks, according to VPSS. On August 7, 2006 the last quarantine
restriction was lifted. In all, 93 localities in eleven districts of the
Southern Federal District and five in the Siberian Federal District have
been affected by the disease this year. The situation remains under the
State Veterinary Service\'s permanent control, VPSS concluded.

### PS&D Tables

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

  **Country**     **Russian                                                                           
                  Federation**                                                                        

  **Commodity**   **Poultry,                                                    (1000 mt)             
                  Meat,                                                         (Mil Head)            
                  Broiler**                                                                           

                  2005           Revised           2006       Estimate          2007       Forecast   UOM

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

  **Market Year                  01/2005                      01/2006                      01/2007    MM/YYYY
  Begin**                                                                                             

  Inventory       0              0                 0          0                 0          0          (MIL
  (Reference)                                                                                         HEAD)

  Slaughter       0              0                 0          0                 0          0          (MIL
  (Reference)                                                                                         HEAD)

  Beginning       80             80                60         59                44         48         (1000 MT)
  Stocks                                                                                              

  Production      740            900               840        1080              0          1260       (1000 MT)

  Whole, Imports  90             90                90         90                0          100        (1000 MT)

  Parts, Imports  1100           1100              1150       1150              0          1050       (1000 MT)

  Intra EC        0              0                 0          0                 0          0          (1000 MT)
  Imports                                                                                             

  Other Imports   0              0                 0          0                 0          0          (1000 MT)

  TOTAL Imports   1190           1190              1240       1240              0          1150       (1000 MT)

  TOTAL SUPPLY    2010           2170              2140       2379              44         2458       (1000 MT)

  Whole, Exports  0              0                 0          0                 0          0          (1000 MT)

  Parts, Exports  1              1                 1          1                 0          1          (1000 MT)

  Intra EC        0              0                 0          0                 0          0          (1000 MT)
  Exports                                                                                             

  Other Exports   0              0                 0          0                 0          0          (1000 MT)

  TOTAL Exports   1              1                 1          1                 0          1          (1000 MT)

  Human           1949           2110              2095       2330              0          2400       (1000 MT)
  Consumption                                                                                         

  Other Use,      0              0                 0          0                 0          0          (1000 MT)
  Losses                                                                                              

  Total Dom.      1949           2110              2095       2330              0          2400       (1000 MT)
  Consumption                                                                                         

  TOTAL Use       1950           2111              2096       2331              0          2401       (1000 MT)

  Ending Stocks   60             59                44         48                0          57         (1000 MT)

  TOTAL           2010           2170              2140       2379              0          2458       (1000 MT)
  DISTRIBUTION                                                                                        

  Calendar Yr.    0              0                 0          0                 0          0          (1000 MT)
  Imp. from U.S.                                                                                      
  --------------- -------------- ----------------- ---------- ----------------- ---------- ---------- ---------

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

  **Commodity**   **PoultryMeat,                                                          (1000 mt)             
                  Turkey**                                                                (Mil Head)            

                  2005             Revised    New        2006       Estimate   New        2007       Forecast   New

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

  **Market Year                    01/2005    01/2005               01/2006    01/2006               01/2007    01/2007
  Begin**                                                                                                       

  Inventory       0                0          0          0          0          0          0          0          0
  (Reference)                                                                                                   

  Slaughter       0                0          0          0          0          0          0          0          0
  (Reference)                                                                                                   

  Beginning       0                0          0          0          0          0          0          0          0
  Stocks                                                                                                        

  Production      17               17         17         18         18         19         0          0          21

  Whole, Imports  1                1          1          1          1          1          0          0          1

  Parts, Imports  99               80         99         99         85         95         0          0          100

  Intra-EU        0                0          0          0          0          0          0          0          0
  Imports                                                                                                       

  Other Imports   0                0          0          0          0          0          0          0          0

  Total Imports   100              81         100        100        86         96         0          0          101

  Total Supply    117              98         117        118        104        115        0          0          122

  Whole, Exports  0                0          0          0          0          0          0          0          0

  Parts, Exports  0                0          0          0          0          0          0          0          0

  Intra EU        0                0          0          0          0          0          0          0          0
  Exports                                                                                                       

  Other Exports   0                0          0          0          0          0          0          0          0

  Total Exports   0                0          0          0          0          0          0          0          0

  Human           116              97         116        117        103        114        0          0          121
  Consumption                                                                                                   

  Other Use,      1                1          1          1          1          1          0          0          1
  Losses                                                                                                        

  Total Dom.      117              98         117        118        104        115        0          0          122
  Consumption                                                                                                   

  Total Use       117              98         117        118        104        115        0          0          122

  Ending Stocks   0                0          0          0          0          0          0          0          0

  Total           117              98         117        118        104        115        0          0          122
  Distribution                                                                                                  

  CY Imp. from    0                0          0          0          0          0          0          0          0
  U.S.                                                                                                          

  Balance         0                0          0          0          0          0          0          0          0

  Inventory       0                0          0          0          0          0          0          0          0
  Balance                                                                                                       

  Production      0                0          0          0          0          0          0          0          0
  Change                                                                                                        

  Import Change   0                0          0          0          0          0          0          0          0

  Export Change   0                0          0          0          0          0          0          0          0

  Trade Balance   -100             -81        -100       -100       -86        -96        0          0          -101

  Consumption     0                0          0          0          0          0          0          0          0
  Change                                                                                                        
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