Russia bans import of U.S. farm goods, but impact may be small

Cornish game hens. (Ralph Lauer/Fort Worth Star-Telegram/MCT)
Cornish game hens. (Ralph Lauer/Fort Worth Star-Telegram/MCT) MCT

U.S. exporters of farm products said Wednesday that they would search for new foreign markets after Russia announced a one-year retaliatory agricultural trade ban as punishment for financial sanctions imposed by the United States and Europe.

President Vladimir Putin said he was consulting with legislators and federal agencies to come up with a complete list of prohibited agricultural products, perhaps by the end of the week. But Russian veterinary officials immediately banned U.S. poultry imports, a step that would hit hardest at exporters in Georgia, Alabama, Mississippi and Arkansas and could also affect seaports such as Charleston, S.C., and Savannah, Ga., from which many poultry shipments embark.

Poultry exports to Russia last year amounted to 304,000 tons, worth $309 million.

Still, the impact may be greater on the average Russian than on American farmers and ranchers; Russia imports about a third of its food needs. Spokesmen for American farm organizations expressed optimism that they could quickly replace the Russian market.

“Although Russia is our second-largest export market for U.S. poultry, our industry is far less dependent on Russia than it once was,” said Toby Moore, spokesman for the USA Poultry and Egg Export Council. “Because of the rapid development of its domestic poultry industry over the last several years, Russia currently accounts for about 7 percent of total U.S. chicken exports. At its peak, Russia was our largest market and accounted for as much as 40 percent of our exports.”

While Russia is now a smaller share of the market for U.S. chicken and turkey exports, losing 7 percent of total foreign sales is still significant. Moore cautioned, however, that “we fully expect the overall impact will be minimal, given the fact that our industry exports chicken and turkey to more than 130 countries around the world.”

California nut growers are also affected. Russia bought more than $425 million worth of tree nuts in 2012, and about $143.7 million of that came from U.S. exporters of almonds and pistachios, according to the U.S. Department of Agriculture.

The Almond Board of California, a Modesto-based trade association, is busily trying to learn more about the sanctions.

“At this point we’re in contact with U.S. authorities to understand specific implication for exports of almonds,” said Julie Adams, the group’s vice president. “At this point we really don’t have further information.”

The largest U.S. almond exporter, Blue Diamond Growers of Sacramento, Calif., didn’t wait for the sanctions. It started turning down business in Russia months ago after the border dispute between Russia and the Ukraine turned violent. The company stopped selling to Russia about six months ago.

“We don’t wait for the government. There are other people who want our almonds, plenty of demand,” said Susan Brauner, director of public affairs for the cooperative to which more than half of California growers belong. “We look forward to working with them in the future. We hope this situation can be worked out in a way that everyone can get back to business as usual.”

Blue Diamond pioneered California exports to Russia. It sold almonds to the former Soviet Union, especially when hazelnuts were in short supply and communist leaders commanded that almonds be used in chocolate bars. Still, Russia remains a tiny export market for California growers, who provide more than 80 percent of the world’s supply and sell far more to Europe, China and India.

Trade data analyzed by McClatchy showed that through May, exports of fruits and tree nuts led all farm exports to Russia at more than $180.4 million over the first five months of 2014.

Poultry and egg exports totaled more than $44.7 million over the five months, while cattle accounted for more than $15.5 million in exports.