Required Report - public distribution

**Date:** 8/26/2005

**GAIN Report Number:** UP5016

UP5018

**Ukraine**

**Livestock and Products**

**Annual Report**

**2005**

**Approved by:**

![](media/image1.wmf)W. Garth Thorburn II

U.S. Embassy Kiev, Ukraine

**Prepared by:**

FAS Staff Kiev

**Report Highlights:**

In 2006, demand for imported red meat will increase significantly, but
U.S. suppliers will not be able to benefit from this strong demand
because there is no bilateral protocol. The domestic industry will
continue to be relatively inefficient and will not be able to satisfy
demand in the near future. Ukraine will continue to import beef to
supplement domestic production that is consumed domestically or exported
to Russia. Likewise, imports of pork will be crucial because
domestically produced product cannot meet demand. Government of Ukraine
policies closed the Ukrainian market to poultry imports in March 2005,
but leave a small window of opportunity for red meat products.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Kiev \[UP1\]

\[UP\]

Table of Contents

[Section I. Narrative 3](#section-i.-narrative)

[Executive Summary 3](#executive-summary)

[Production 3](#production)

[Consumption 4](#consumption)

[Marketing 4](#marketing)

[Trade 5](#trade)

[Policy 5](#policy)

[Section II. Statistical Tables 9](#section-ii.-statistical-tables)

[Livestock Inventories by Type of Farm in Ukraine as of July 1, 2004
(1000 heads)
9](#livestock-inventories-by-type-of-farm-in-ukraine-as-of-july-1-2004-1000-heads)

[Ukraine Cattle PSD Table, 1000 Head
9](#ukraine-cattle-psd-table-1000-head)

[Ukraine Beef and Veal PSD Table, 1000 MT CWE, 1000 Head
10](#ukraine-beef-and-veal-psd-table-1000-mt-cwe-1000-head)

[Ukraine Cattle Export Trade Matrix
10](#ukraine-cattle-export-trade-matrix)

[Fresh or Chilled Beef Export Trade Matrix (HS 0201), MT
10](#fresh-or-chilled-beef-export-trade-matrix-hs-0201-mt)

[Frozen Beef Export Trade Matrix (HS 0202), MT
11](#frozen-beef-export-trade-matrix-hs-0202-mt)

[Processed Beef Export Trade Matrix (HS 16025), MT
11](#processed-beef-export-trade-matrix-hs-16025-mt)

[Frozen Beef Import Trade Matrix (HS 0202), MT
11](#frozen-beef-import-trade-matrix-hs-0202-mt)

[Processed Beef Import Trade Matrix (HS 16025), MT
11](#processed-beef-import-trade-matrix-hs-16025-mt)

[Average Monthly Beef Wholesale Prices in Ukraine, LWE
12](#average-monthly-beef-wholesale-prices-in-ukraine-lwe)

[Ukraine Swine PSD Table, 1000 Head
12](#ukraine-swine-psd-table-1000-head)

[Ukraine Pork PSD Table, 1000 Head, 1000 CWE
13](#ukraine-pork-psd-table-1000-head-1000-cwe)

[Ukraine, Pork Import Trade Matrix (HS 0203)
13](#ukraine-pork-import-trade-matrix-hs-0203)

[Ukraine, Pork Export Trade Matrix
14](#ukraine-pork-export-trade-matrix)

[Average Monthly Pork Wholesale Prices in Ukraine, LWE
14](#average-monthly-pork-wholesale-prices-in-ukraine-lwe)

# Section I. Narrative

# 

## Executive Summary

In 2006, Ukraine's beef and pork enterprises will continue to be
extremely inefficient. Beef will continue to be supplied predominately
from private households and from dairy animals. A few investment
projects aimed at building modern hog operations will be unable to
increase pork supplies or dramatically improve the deficit in the
market. Both production and consumption of red meat in Ukraine in 2005
have decreased, yet some signs of stabilization are evident in
industrial pork production. The condition of the beef industry is
expected to go from bad to worse in 2006. Private households where
cattle are concentrated, will continue to produce milk and not beef. The
number of dairy animals will continue to decline despite desperate GOU
efforts to stabilize the situation. The demand for red meat will grow in
2006 due to increasing incomes which will create significant incentives
to import. Traders suggest that imports of red meat will skyrocket in
2005, but future developments will depend mostly on GOU policies.

## Production

In 2005, two contradictory trends were evident in Ukraine. First, prices
increased for all red meat products. Second, both household and
industrial farms recorded a general decrease in production of all red
meats and byproducts. Overall production of beef and pork in 2005 is
expected to decrease by 10-12%. For 2006, production of meat will
continue to decline and meat prices will continue to increase, although
at a slower rate. Production of beef will continue to be the most
inefficient sector and is viewed by milk herd owners only as a means to
supplement their income. Concomitantly, production of pork from private
households will stabilize and pork production in industrial farms will
increase in respond to increased investment.

Beef production is virtually absent in Ukraine. The number of beef
animals constitutes only 0.7% of Ukraine's cattle population and the
number continues to shrink along with the rest of Ukraine's cattle
population. Beef cattle are concentrated in a few Northern regions of
the country. The vast majority of Ukraine's cattle population is dairy
or dual-purpose animals. Almost all the beef produced in the country is
veal (slaughtered male calves 1 -- 1.5 years of age), or from dairy
animals slaughtered after their last lactation, or because of low
productivity and diseases.

The number of animals exported from Ukraine is declining due to growing
meat prices in the country. The GOU intents to decrease the export duty
for live animals, however industry experts do not expect this move to
impact exports significantly. If approved, the export duty will decrease
by 1 per cent per year until it reaches 10%. The law reducing the export
duty was submitted by GOU to the Ukrainian Parliament to facilitate
Ukraine's accession to the WTO.

Cattle and cow inventories for 2004 are changed in the PSD table to
reflect official changes in Ukrainian State Statistical Committee
preliminary calculations and official year-end statistics.

As the number of cattle held by industrial enterprises and private farms
decrease, production efficiency is expected to increase because of
better feed availability and better animal care. Currently, cattle
breeders concentrate more on efficiency than on absolute numbers of
cattle kept. Good grain yields and forage crops in 2004 also contributed
to higher slaughter weight for cattle and hogs. Thus slaughter weight is
growing in 2005 and is expected to grow in 2006.

The trend in pork production is expected to change in 2006. By the end
of 2005, production of pork from large industrial operations is expected
to increase by 10-12%, while production from the household sector will
somewhat decline. However, production growth will surpass production
loss (as officially reported in the PSD) and overall production will
grow marginally. The production increase is not expected to be
significant due to the increased market access for imported product.
Pork production in Ukraine is qualitatively different and is
increasingly based on industrial technologies, renewed genetics and
innovative management practices.

The reported number of piglets in 2004 was much higher than forecasted
in 2003 when the aftermath of Ukraine's failed grain crop was expected
to take effect. The new PSD table was adjusted to reflect the official
number from the State Statistics Committee.

Please note that retail price information previously published by the
State Statistics Committee is no longer available, so wholesale prices
for pork and beef from Vinnitsa region are provided in Section II of the
report. For pork, the wholesale price is for 1 kilogram of meat (PWE),
and for beef the procurement price of slaughterhouses in UAH is for 1
kilogram in LWE.

As required by the reporting instructions, beef import figures for the
PSD were converted into CWE.

## Consumption

In 2005, incomes of Ukrainian consumers were on the rise and this trend
is likely to continue in 2006. However, the precipitous jump in meat
prices negated a substantial increase in consumption. (Note: the average
monthly disposable income in Ukraine remains quite low at UAH 442 (\$88)
in April 2005.) The Ukrainian meat market remains extremely price
sensitive and 2006 consumption patterns will greatly depend on
availability of cheap product no matter if imported or produced
domestically. Thus, given the inability of the Ukrainian sector to
supply enough product and at a reasonable price, consumption patterns
will be determined by the level of imports and GOU import policies.

Many mid-income Ukrainian consumers want to increase red meat
consumption (to increase the absolute volume of red meat consumed or as
a substitute for poultry), but were unable to do so in 2005 due to high
prices. Smocked poultry sausages and poultry bolognas were not demanded
by consumers despite attractive prices. Traditionally, Ukrainians prefer
beef and pork sausages and canned meat. Given import forecasts for 2006,
it is quite likely that many consumers will revert back to traditional
consumption patterns. Pork could once again become the most consumed
meat. Low-income consumers will continue to prefer poultry even at
somewhat higher prices.

Import of premium quality beef and pork is possible but unlikely. The
average consumer associates veal as high quality beef, not beef derived
from beef animals, as is the case in many western countries. Ukrainian
consumers perceive high quality pork as more fatty and derived from
young animals. Rumors about the bird flue pandemic in Russia may also
influence consumption patterns and shift preferences towards red meat.

## Marketing

The vast majority of domestically produced red meat is sold chilled or
fresh and through the system of open-air outlets. In many smaller
grocery and convenience stores, red meat is not sold at all. The share
of supermarkets to open air markets continues to increase, but their
market influence and share is noticeable only in larger cities with a
population over 1 million. Imported frozen products are used almost
exclusively by processing facilities and never reach the retail market.
All beef is sold as no-name (not branded) product. Branding is used
almost exclusively by big sausage and smoked product producers.

FAS/Kiev is aware of one beef supplier (producing steaks) that brands
their product. The company is situated in Southern Ukraine and made
significant investments in raising grass-fed Black Angus cattle. The
company has an effective marketing and advertising campaign as well. The
company used a Ukrainian nucleus and exclusively purchases US genetics
in order to improve the cattle. The retail price for these products
exceed similar products derived from milk animals by two to three times.
The company reports significant demand for their product from the hotel,
restaurant and catering sector and from large supermarket chains that
sell over 50 vacuum packed portion steaks per outlet per day.

The Ministry of Agricultural Policies of Ukraine has initiated the
creation of the Association of Meat Producers and Processors. The
association lobbies for the industry's interests and coordinate members'
marketing activities. The Meat Producers and Processors Association are
not expected to undertake serious marketing projects in 2006.

## 

## Trade

A decrease in the import tariff will have an obvious and positive impact
on imports of red meat into Ukraine. This impact will be amplified by
prohibitively high import duties applied to poultry. Customs Service
data for the first 5 months of 2005 show significant increases of beef
and pork imports. Imports will increase even higher due to the
implementation of a newly reduced import tariff on August 16^th^ of
2005. According to industry experts, many commercial companies began to
import beef and pork in July 2005, but did not custom clear their
product until mid August to benefit from the lower tariff.

In 2006, Ukraine will continue to import and export both pork and beef
because of the Free Trade Area (FTA) with Russia. The FTA allows
Ukrainian producers to benefit from sales to the large Russian market,
which is protected from other suppliers by meat quotas. In many cases
imported pork replaces domestically produced product in Ukraine while
domestically produced meat is exported to Russia. During 2005, the
Russian veterinary service spotted some de-boned, relabeled and
re-exported product, but the conflict was settled quickly with no impact
on bilateral trade.

When analyzing trade statistics, one should be aware that the U.S. and
Ukraine have no agreed bilateral protocol for U.S. beef and pork. FAS
Kiev cannot explain why official Ukrainian statistics capture the import
of U.S. meat products; neither can Ukrainian Customs or the Veterinary
Services.

The macroeconomic situation facilitates imports. The Ukrainian currency
Hryvna (UAH) has appreciated against the U.S. dollar throughout 2005. By
mid year, the UAH appreciated almost 6%. Ukraine's currency market
expects the downward trend of the U.S. dollar relative to the UAH to
continue through early 2006.

Ukraine has veterinary requirements that limit imports of beef and pork
to only carcasses. This rule indirectly bans product packaged in boxes.
However, imports of boneless beef and pork packaged in boxes are found
in official customs statistics.

Exports of all kinds of red meat are subject to export licensing. This
trade regulating mechanism was established in late 2004 in response to a
meat shortage. It was supposed to limit exports to Russia under FTA and
decrease domestic prices. Thus far exporting companies have not reported
any problem with licenses and export continues to flow freely.

## Policy

Facing a precipitous increase in meat prices, the GOU attempted to
implement policies designed to slow the price surge. In most cases the
GOU has shown distrust in market mechanisms in the agriculture sector,
and used soviet-style administrative tools in an attempt to control the
market. All GOU efforts to halt price increases failed spectacularly.
Continuation of these policies in 2006 could lead to further price
increases. GOU accused middlemen and butchers of unjustified price
increases and monopolistic behavior. The GOU failed to explain how
200,000 middlemen and butchers could be considered monopolistic.

One-market regulation measure implemented by the GOU eliminated
middlemen in the producer-middleman-consumer chain that has successfully
operated in the Ukrainian red meat market for many years. The GOU forced
local authorities to reserve special sale kiosks for producers in all
open-air markets (bazaars) across the country. The kiosks remained empty
in the majority of cases due to minimal sales profit. Producers prefer
to sell their animals to local butcher\'s workshops as was done in the
past. Producers also lacked experience, transport and infrastructure
access. They also failed to allocate a sufficient amount of time
necessary to successfully market their product in remote cities and
towns.

During the second attempt to eliminate middlemen, the GOU decided to
function as the middleman itself. This role was granted to the State
Reserve Committee (SRC). The SRC was supposed to procure cheap meat from
Ukrainian producers and then sell the product at a lower price. The SRC
held a number of tenders in an attempt to procure meat, but was
successful only a couple of times, when it managed to procure 600 tons
of pork and 540 tons of beef. The SRC originally wanted to procure
20,000 tons of beef and 25,000 tons of pork. The only reason for the low
purchase level was the low price offered by the SRC.

All the policies described above were implemented in early 2005 and is
expected to persist throughout 2005. No one expected these moves would
influence real product supply or demand for red meat. In August 2005,
the import duty decreased (please refer to Table 1) and will have an
impact on the market situation. It is expected that increased imports of
meat from Argentina and Brazil will help to lower prices and will shift
consumer preferences back from poultry products to beef and pork.

The Ukrainian market witnessed a steady increase in consumption of
poultry in late 1980's and early 1990\'s. The reasons for this trend
were declining incomes, low poultry prices and a crisis in domestic red
meat production. Ukrainians who traditionally preferred pork and beef
had to switch to cheap poultry. The situation may change in the second
half of 2005 and 2006.

The law changing the Customs Tariff Schedule was adopted by the
Parliament in July 2005 and came into effect on August 16, 2005. Tariff
rates for beef and pork were reduced but import duty rates for poultry
products remained high (please refer to Table 1 for red meat import
duties and GAIN Report UP5017 for poultry duties). Another important
factor facilitating red meat imports was the elimination of the tax
privileges associated with the Free Economic Zones (FEZs) on March 28,
2005. Poultry used to be imported through the FEZs duty free. Currently,
applied import duties for the majority of poultry products are
prohibitive. Market developments during the summer of 2005 suggest that
red meat may become the next best seller in Ukraine replacing poultry.

Table 1. Ukraine's Import Tariffs for Poultry Products (Old versus New
Rates)

  ------------- --------------------- ---------- --------- ---------- ---------
  Ukrainian HS  Code Description      Old                  New        
  Code                                Import\              Import\    
                                      Tariff               Tariff     
                                      Schedule             Schedule   

                                      Official   Fixed     Official   Fixed
                                      Ad valorem minimum   Ad valorem minimum
                                      Import     rate, EUR Import     rate, EUR
                                      Duty Rate  per 1 kg. Duty Rate  per 1 kg.

  0201\         Beef Fresh or Chilled \-         1         10%        0.6
  (except HS                                                          
  Codes below)                                                        

  HS 0201 20 10 Other Beef Cuts and   \-         1         \-         1
  HS 0201 30 90 Offal                                                 

  0202\         Beef Frozen           \-         1         10%        0.6
  (except HS                                                          
  Codes below)                                                        

  HS 0202 20 90 Other Beef Cuts and   \-         1         \-         1
  HS 0202 30    Offal                                                 

  0202 30 90    Other cuts of bovine  20%        \-        20%        \-
                animals                                               

  0203\         Pork fresh, chilled   \-         1         \-         1
  (except HS    or frozen                                             
  Codes below)                                                        

  0203 11\      Carcasses, Halves and \-         1         10%        0.6
  0203 12 11\   quarters                                              
  0203 12 19\                                                         
  0203 19 11\                                                         
  0203 21 10\                                                         
  0203 22 11\                                                         
  0203 22 19\                                                         
  0203 29 11                                                          
  ------------- --------------------- ---------- --------- ---------- ---------

*Source: The Law of Ukraine \"On Customs Tariff\" as of July of 2005 and
as of August of 2005.*

*All tariff rates are MFN rates.*

The changes to the new Customs Tariff Schedule clearly discriminates
against meat cuts and favors carcasses, halves and quarters. According
to official statements this was done for two reasons. First, the GOU
wants increased veterinary control of imported meat, which is easier to
accomplish if each carcass or half has an official stamp from the
exporting country's veterinary service. Second, there is a strong
misperception that carcasses and bigger cuts are higher quality than
small-deboned cuts packed in boxes. Agricultural lobbyists in Parliament
truly believe that importers will mix higher quality cuts with lower
quality ones or the boxes will contain small cuts of unknown origin that
are impossible to trace.

The same 0.6 EUR per kilogram import duty is applied to both beef and
pork products (Please refer to Table 1). Given lower international pork
prices, the real applied import duty is relatively higher. According to
official Ukrainian customs statistics the *ad valorem* equivalent for
beef carcasses is between 56% and 149% and for pork carcasses - between
111% and 149%. A*d valorem* rate calculations depend on the year from
which the reported import price is used and the declared average price
of the imported commodity. Despite these negatives factors, imports of
pork are more attractive since wholesale and retail prices for this
product in Ukraine are higher than for beef. This price phenomenon has
existed in the Ukrainian market for many years and is a result of
excessively high cattle inventories and oversupply of beef.

The GOU continues to maintain a support program aimed at increasing
slaughter weight of beef animals and hogs. In order to receive GOU
compensation of 1.3 UAH (\$ 0.26) per 1 kilogram of beef LWE, the weight
of the animal should be no less than 300 kilograms for animals from the
household sector and 390 kilograms LWE for animals coming from
industrial enterprises. For hogs, the state support level is 1 UAH (\$
0.2) per kilogram in LWE. The weight of the animal is no less than
95-200 and 95-130 kilograms, respectively. The impact of the support
program continues to be insignificant, and the program is not corruption
free. The increase in the animals' slaughter weight for 2005 and 2006
should be attributed to higher meat prices, better feed availability and
better management rather to state support programs.

An animal identification (traceability) campaign launched by the
Ministry of Agricultural Policies in 2004 was slow to be implemented.
Producers of beef and pork did not want to incur expenses associated
with the program. There is some evidence that in 2006 only officially
registered animals will be eligible for state support. This may give the
program a boost, especially for industrial enterprises that benefit from
state support the most.

The Ukrainian livestock sector continues to benefit from different
agricultural support programs operated by the state. The state
compensates a portion of the interest charged for bank loans and 50% of
the cost of domestically produced equipment.

# Section II. Statistical Tables

## Livestock Inventories by Type of Farm in Ukraine as of July 1, 2004 (1000 heads)

  ---------------------------------- ----------- ------------ -------------
                                     As of June  As of June   2005 as % of
                                     1st, 2004   1st, 2005    2004

  Cattle, total                      8042,9      7509,5       93,4

  Including cows                     4264,2      3963,9       93,0

  Cattle, held by Private Households 4897,3      4697,1       95,9

  Including Cows                     3209,6      3041,9       94,8

  Cattle held by Former Collective   3145,6      2812,4       89,4
  Farms                                                       

  Including Cows                     1054,6      922,0        87,4

  Bovine, total                      6993,6      6928,2       99,1

  Bovine held by Private Households  4922,2      4600,5       93,5

  Bovine held by Former Collective   2071,4      2327,7       112,4
  Farms and Industrial Farms                                  
  ---------------------------------- ----------- ------------ -------------

Data Source: State Statistics Committee of Ukraine

## Ukraine Cattle PSD Table, 1000 Head

+-----------------+--------+--------+-------+-------+------+---------+
| Country         | U      |        |       |       |      |         |
|                 | kraine |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Commodity       | Animal |        |       |       |      |         |
|                 | Nu     |        |       |       |      |         |
|                 | mbers, |        |       |       |      |         |
|                 | Cattle |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
|                 | 2004   | R      | 2005  | Est   | 2006 | F       |
|                 |        | evised |       | imate |      | orecast |
+-----------------+--------+--------+-------+-------+------+---------+
|                 | USDA   | Post   | USDA  | Post  | USDA | Post    |
|                 | Of     | Es     | Off   | Est   | Offi | E       |
|                 | ficial | timate | icial | imate | cial | stimate |
|                 | \      | \      | \[    | \[    | \[O  | \[New\] |
|                 | [Old\] | [New\] | Old\] | New\] | ld\] |         |
+-----------------+--------+--------+-------+-------+------+---------+
| ####### Ma      |        | 0      |       | 01    |      | 01.2006 |
| rket Year Begin |        | 1.2004 |       | .2005 |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Cattle    | 7886   | 7712   | 6780  | 6992  | 6212 | 6712    |
| Beg. Stks       |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Dairy Cows Beg. | 4330   | 4227   | 3940  | 3914  | 0    | 3826    |
| Stks            |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Beef Cows Beg.  | 51     | 56     | 46    | 58    | 0    | 54      |
| Stocks          |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Production      | 3050   | 3084   | 2955  | 3019  | 0    | 2910    |
| (Calf Crop)     |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Intra EC        | 0      | 0      | 0     | 0     | 0    | 0       |
| Imports         |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Imports   | 1      | 1      | 2     | 1     | 0    | 1       |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL Imports   | 1      | 1      | 2     | 1     | 0    | 1       |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL SUPPLY    | 10937  | 10797  | 9737  | 10012 | 6212 | 9623    |
+-----------------+--------+--------+-------+-------+------+---------+
| Intra EC        | 0      | 0      | 0     | 0     | 0    | 0       |
| Exports         |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Exports   | 6      | 6      | 5     | 3     | 0    | 3       |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL Exports   | 6      | 6      | 5     | 3     | 0    | 3       |
+-----------------+--------+--------+-------+-------+------+---------+
| Cow Slaughter   | 0      | 0      | 0     | 0     | 0    | 0       |
+-----------------+--------+--------+-------+-------+------+---------+
| Calf Slaughter  | 0      | 0      | 0     | 0     | 0    | 0       |
+-----------------+--------+--------+-------+-------+------+---------+
| Other Slaughter | 4021   | 3714   | 3400  | 3228  | 0    | 3043    |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Slaughter | 4021   | 3714   | 3400  | 3228  | 0    | 3043    |
+-----------------+--------+--------+-------+-------+------+---------+
| Loss            | 130    | 85     | 120   | 69    | 0    | 67      |
+-----------------+--------+--------+-------+-------+------+---------+
| Ending          | 6780   | 6992   | 6212  | 6712  | 0    | 6510    |
| Inventories     |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL           | 10937  | 10797  | 9737  | 10012 | 0    | 9623    |
| DISTRIBUTION    |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Calendar Yr.    | 0      | 0      | 0     | 0     | 0    | 0       |
| Imp. from U.S.  |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Calendar Yr.    | 0      | 0      | 0     | 0     | 0    | 0       |
| Exp. to U.S.    |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+

## Ukraine Beef and Veal PSD Table, 1000 MT CWE, 1000 Head

+-----------------+--------+--------+-------+-------+------+---------+
| Country         | U      |        |       |       |      |         |
|                 | kraine |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Commodity       | Meat,  |        |       |       |      |         |
|                 | Beef   |        |       |       |      |         |
|                 | and    |        |       |       |      |         |
|                 | Veal   |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
|                 | 2003   | R      | 2004  | Est   | 2005 | F       |
|                 |        | evised |       | imate |      | orecast |
+-----------------+--------+--------+-------+-------+------+---------+
|                 | USDA   | Post   | USDA  | Post  | USDA | Post    |
|                 | Of     | Es     | Off   | Est   | Offi | E       |
|                 | ficial | timate | icial | imate | cial | stimate |
|                 | \      | \      | \[    | \[    | \[O  | \[New\] |
|                 | [Old\] | [New\] | Old\] | New\] | ld\] |         |
+-----------------+--------+--------+-------+-------+------+---------+
| ####### Ma      |        | 0      |       | 01    |      | 01.2005 |
| rket Year Begin |        | 1.2003 |       | .2004 |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Slaughter       | 4021   | 3714   | 3400  | 3228  | 0    | 3043    |
| (Reference)     |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Beginning       | 15     | 15     | 15    | 15    | 15   | 15      |
| Stocks          |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Production      | 530    | 613    | 500   | 532   | 0    | 500     |
+-----------------+--------+--------+-------+-------+------+---------+
| Intra EC        | 0      | 0      | 0     | 0     | 0    | 0       |
| Imports         |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Imports   | 2      | 5      | 1     | 25    | 0    | 35      |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL Imports   | 2      | 5      | 1     | 25    | 0    | 35      |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL SUPPLY    | 547    | 633    | 516   | 572   | 15   | 550     |
+-----------------+--------+--------+-------+-------+------+---------+
| Intra EC        | 0      | 0      | 0     | 0     | 0    | 0       |
| Exports         |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Total Exports   | 100    | 86     | 90    | 60    | 0    | 60      |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL Exports   | 100    | 86     | 90    | 60    | 0    | 60      |
+-----------------+--------+--------+-------+-------+------+---------+
| Human Dom.      | 432    | 532    | 411   | 497   | 0    | 475     |
| Consumption     |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Other Use,      | 0      | 0      | 0     | 0     | 0    | 0       |
| Losses          |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL Dom.      | 432    | 532    | 411   | 497   | 0    | 475     |
| Consumption     |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Ending Stocks   | 15     | 15     | 15    | 15    | 0    | 15      |
+-----------------+--------+--------+-------+-------+------+---------+
| TOTAL           | 547    | 633    | 516   | 572   | 0    | 550     |
| DISTRIBUTION    |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Calendar Yr.    | 0      | 1      | 0     | 0     | 0    | 0       |
| Imp. from U.S.  |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+
| Calendar Yr.    | 0      | 0      | 0     | 0     | 0    | 0       |
| Exp. to U.S.    |        |        |       |       |      |         |
+-----------------+--------+--------+-------+-------+------+---------+

## Ukraine Cattle Export Trade Matrix

  ----------------------- -------------- -------------- -------------------
  Time Period                            Units:         Heads

  Imports for:            2003                          2004

  U.S.                     0             U.S.            0

  Jordan                  5689           Jordan         2904

  Lebanon                 10163          Lebanon        1683

  Syria                   2098           Syria          795

  Total for Others        17950                         5382

  Others not Listed       31                            727

  **Grand Total**         17981                         6109
  ----------------------- -------------- -------------- -------------------

Data Source: State Statistics Committee of Ukraine

## Fresh or Chilled Beef Export Trade Matrix (HS 0201), MT

  ------------------------------ ---------- ---------- ----------- ------------
  **Exports to**                 **2003**   **2004**   **Jan-May   **Jan-May
                                                       2004**      2005**

  United States                  0          0          0           0

  Lebanon                        0          21         0           0

  Russian Federation             193        198        0           0

  Turkey                         0          0          0           0

  Bulgaria                       10         0          0           0

  Others                         1          0          0           0

  **Total**                      204        219        1           0
  ------------------------------ ---------- ---------- ----------- ------------

*Data Source: State Statistics Committee of Ukraine*

## Frozen Beef Export Trade Matrix (HS 0202), MT

  ------------------------------ ---------- ---------- ----------- ------------
  **Exports to**                 **2003**   **2004**   **Jan-May   **Jan-May
                                                       2004**      2005**

  United States                  0          0          0           0

  Russia                         145703     77329      27497       18262

  Lebanon                        0          9          9           0

  Azerbaijan                     211        0          0           0

  Latvia                         20         0          0           0

  Byelarus                       18         0          0           0

  Others                         0          0          0           0

  **Total**                      145951     77338      27506       18262
  ------------------------------ ---------- ---------- ----------- ------------

*Data Source: State Statistics Committee of Ukraine*

## Processed Beef Export Trade Matrix (HS 16025), MT

  ------------------------------ ---------- ---------- ----------- ------------
  **Exports to**                 **2003**   **2004**   **Jan-May   **Jan-May
                                                       2004**      2005**

  United States                  1          3          3           0

  Russia                         1158       1115       447         235

  Turkmenistan                   234        232        176         0

  Azerbaijan                     150        48         15          14

  Moldova                        15         41         13          12

  Georgia                        15         20         15          26

  Belarus                        0          6          6           0

  Liberia                        0          3          3           0

  Others                         141        0          0           0

  **Total**                      1714       1469       677         286
  ------------------------------ ---------- ---------- ----------- ------------

*Data Source: State Statistics Committee of Ukraine*

There were no sizable imports of Fresh or Chilled Beef (HS 0201) to
Ukraine in 2004 and 2005

## Frozen Beef Import Trade Matrix (HS 0202), MT

  ------------------------------ ---------- ---------- ----------- ------------
  **Exports to**                 **2003**   **2004**   **Jan-May   **Jan-May
                                                       2004**      2005**

  United States                  4          1167       1           0

  Argentina                      0          1224       0           1992

  Hyngary                        264        477        198         119

  Brazil                         0          457        0           2172

  Australia                      0          206        0           0

  Georgia                        0          0          0           832

  Others                         39         22         20          21

  **Total**                      307        3553       219         5136
  ------------------------------ ---------- ---------- ----------- ------------

*Data Source: State Statistics Committee of Ukraine*

## Processed Beef Import Trade Matrix (HS 16025), MT

  ------------------------------ ---------- ---------- ----------- ------------
  **Exports to**                 **2003**   **2004**   **Jan-May   **Jan-May
                                                       2004**      2005**

  United States                  0          0          0           0

  Russia                         641        64         0           96

  Others                         0          2          0           0

  **Total**                      641        66         0           96
  ------------------------------ ---------- ---------- ----------- ------------

*Data Source: State Statistics Committee of Ukraine*

## Average Monthly Beef Wholesale Prices in Ukraine, LWE

  ----------------- -------------------- --------------------- -----------
  Country           Ukraine                                    

  Commodity         Meat, Beef and Veal                        

  Prices in          UAH                 per uom                1 kilogram

  Year              2004                 2005                  \% Change

  Jan               5,7                  5,7                   0%

  Feb               5,9                  6,4                   8%

  Mar               6                    6,7                   12%

  Apr               6                    6,2                   3%

  May               5,7                  5,8                   2%

  Jun               5,3                  6,5                   23%

  Jul               5,5                  6,8                   24%

  Aug               5,3                  6,8                   28%

  Sep               5,3                                        -100%

  Oct               5,5                                        -100%

  Nov               5,4                                        -100%

  Dec               5,4                                        -100%

  Exchange Rate     5,05                 Local Currency/US \$  

  Date of Quote     08/19/2005           MM/DD/YYYY            
  ----------------- -------------------- --------------------- -----------

*Data Source: Agricultural Marketing Project; Post's own estimates*

## Ukraine Swine PSD Table, 1000 Head

  ------------------ ---------- ---------- ---------- ---------- ---------- ----------
  Country            Ukraine                                                

  Commodity          Animal                                                 
                     Numbers,                                               
                     Swine                                                  

                     2004       Revised    2005       Estimate   2006       Forecast

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

  **Market Year                 01.2004               01.2005               01.2006
  Begin**                                                                   

  TOTAL Beginning    7470       7321       6000       6461       6350       6480
  Stocks                                                                    

  Sow Beginning      530        530        430        510        0          520
  Stocks                                                                    

  Production (Pig    5300       6254       5200       6120       0          6240
  Crop)                                                                     

  Intra EC Imports   0          0          0          0          0          0

  Total Imports      0          0          0          0          0          0

  TOTAL Imports      0          0          0          0          0          0

  TOTAL SUPPLY       12770      13575      11200      12581      6350       12720

  Intra EC Exports   0          0          0          0          0          0

  Total Exports      0          0          0          0          0          0

  TOTAL Exports      0          0          0          0          0          0

  Sow Slaughter      0          0          0          0          0          0

  OTHER SLAUGHTER    5870       6254       4050       5301       0          5370

  Total Slaughter    5870       6254       4050       5301       0          5370

  Loss               900        860        800        800        0          800

  Ending Inventories 6000       6461       6350       6480       0          6550

  TOTAL DISTRIBUTION 12770      13575      11200      12581      0          12720

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

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

## Ukraine Pork PSD Table, 1000 Head, 1000 CWE

  -------------------- ---------- ---------- ---------- ---------- ---------- ----------
  Country              Ukraine                                                

  Commodity            Meat,                                                  
                       Swine                                                  

                       2004       Revised    2005       Estimate   2006       Forecast

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

  **Market Year                   01.2004               01.2005               01.2006
  Begin**                                                                     

  Slaughter            5870       6254       4050       5301       0          5370
  (Reference)                                                                 

  Beginning Stocks     22         22         22         22         22         22

  Production           460        558        330        475        0          490

  Intra EC Imports     0          0          0          0          0          0

  Total Imports        30         52         30         75         0          60

  TOTAL Imports        30         52         30         75         0          60

  TOTAL SUPPLY         512        632        382        572        22         572

  Intra EC Exports     0          0          0          0          0          0

  Total Exports        12         8          12         6          0          10

  TOTAL Exports        12         8          12         6          0          10

  Human Dom.           478        602        348        544        0          540
  Consumption                                                                 

  Other Use, Losses    0          0          0          0          0          0

  TOTAL Dom.           478        602        348        544        0          540
  Consumption                                                                 

  Ending Stocks        22         22         22         22         0          22

  TOTAL DISTRIBUTION   512        632        382        572        0          572

  Calendar Yr. Imp.    0          8          0          0          0          0
  from U.S.                                                                   

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

## Ukraine, Pork Import Trade Matrix (HS 0203)

  -------------------- --------------- ------------------ ----------------
  Commodity            Meat, Swine                        

  Time Period                          Units:             1 MT

  Imports for:         2003                               2004

  U.S.                 519             U.S.               8025

  Others                               Others             

  Brazil               0               Brazil             19810

  Poland               7549            Poland             16514

  China                0               China              2271

  France               605             France             1105

  Germany              407             Germany            1033

  Belgium              140             Belgium            180

  Austria              164             Austria            140

  Hungary              140             Hungary            62

  Czech Republic       0               Czech Republic     61

  Denmark              79              Denmark            1

  Total for Others     9084                               41177

  Others not Listed    0                                  0

  **Grand Total**      **9603**                           **49202**
  -------------------- --------------- ------------------ ----------------

*Data Source: State Statistics Committee of Ukraine*

## Ukraine, Pork Export Trade Matrix

  ---------------------- -------------- ---------------------- ------------
  Country                Ukraine                               

  Commodity              Meat, Swine                           

  Time Period                           Units:                 1 MT

  Exports for:           2003                                  2004

  U.S.                                  U.S.                    

  Others                                Others                 

  Russia                 12330          Russia                 7833

  Total for Others       12330                                 7833

  Others not Listed      0                                     0

  **Grand Total**        **12330**                             **7833**
  ---------------------- -------------- ---------------------- ------------

*Data Source: State Statistics Committee of Ukraine*

## Average Monthly Pork Wholesale Prices in Ukraine, LWE

  ----------------- -------------------- --------------------- -----------
  Country           Ukraine                                    

  Commodity         Meat, Swine                                

  Prices in          UAH                 per uom                1 kilogram

  Year              2004                 2005                  \% Change

  Jan               8                    10,8                  0%

  Feb               7,8                  10,8                  8%

  Mar               7,2                  10,8                  12%

  Apr               7                    10,6                  3%

  May               6,8                  10,7                  2%

  Jun               7,3                  12                    23%

  Jul               8                    11,2                  24%

  Aug               7,7                  11,2                  28%

  Sep               8,7                                        -100%

  Oct               9,7                                        -100%

  Nov               9,8                                        -100%

  Dec               10,5                                       -100%

  Exchange Rate     5,05                 Local Currency/US \$  

  Date of Quote     08/19/2005           MM/DD/YYYY            
  ----------------- -------------------- --------------------- -----------

*Data Source: Agricultural Marketing Project; Post's own estimates*

#