US, EU farmers feel hit from Russia food ban

Global Business

U.S. farmers are directly in the line of fire when it comes to those Russian sanctions.

The American Farm Bureau says U.S. agriculture is projected to lose about $850 million of annual exports.

Follow Daniel Ryntjes on Twitter @danielryntjes

US farmers feel hit from Russia food ban

U.S. farmers are directly in the line of fire when it comes to those Russian sanctions. The American Farm Bureau says U.S. agriculture is projected to lose about 850 million of annual exports.

Of the $850 million the American Farm Bureau says will be lost in agricultural export trade to Russia, the biggest chunk is the $310 million in chicken meat. It represents about 7 percent of total U.S. poultry exports. But back in 1997, Russia accounted for 40 percent of U.S. poultry exports.

“It’s still an important market for us, last year, in terms of volume it ranked number two, as the export destination for our chicken and in terms of value it ranked number three. So it’s still an important market for us, but not nearly as important as it was a few years ago.” – Tom Super, Vice President Communications, National Chicken Council

Moscow banning nearly all agricultural imports from countries supporting trade sanctions against Russia means U.S. chicken producers are getting on the phone seeking other buyers. That job has been made easier because of an increased push toward diversification in the last ten years.

“We sell a lot to many countries, but we probably sell some agricultural products to almost every country in the world, so there’s a lot of diversification. What we’ve also had, of course with Russia specifically, we’d like to do more, but we’ve had these ongoing issues.” – David Salmonsen, Senior Director, American Farm Bureau.

In recent years, Russia has restricted imports of beef and pork citing concerns over differing production and sanitary standards. This year, many such restrictions on trade were lifted and there were several months of normalized trade before this recently imposed 12-month ban, which some think will be extended by Moscow.

“I don’t see why these sanctions would come off, I think we’re going to be in this, what I would call this ‘permafrost phase’ for really a considerable period of time.” – Gary Hufbauer, Senior Fellow, Peterson Institute for International Economics.

The ability to seek new markets for current U.S. products is also made easier because, unlike the European fruit and vegetable producers, most U.S. exports to Russia are not as perishable. That’s certainly the case for U.S. almond and pistachio nut producers in California who will lose $170 million of trade to Russia, but that product can easily be stored and sold elsewhere.

Despite Russia being the fifth-largest agricultural importer in the world last year, the U.S. only sold 1 percent of its agricultural exports there, amounting to a sizable, but manageable, $1.3 billion per year.

On the other hand, European Union officials are meeting Friday to discuss additional measures to prevent long-term damage from Russia’s food ban. The E.U. has already offered financial assistance to some food producers. Meanwhile, countries like France are coming to terms with a new reality.

Follow Sandra Gathmann on Twitter @SandraGathmann

For more, CCTV America spoke to Jason Karaian, Senior Europe Correspondent at Quartz. He recently wrote an article about the impact of Russia’s sanctions on European consumer prices.