Economic crisis in Russia hurting Md.'s poultry exports Sales to state's top overseas chicken market are off 50%

Agriculture

September 16, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

The Russian financial crisis is taking a big bite out of Maryland poultry exports, which have plummeted recently, a state official said yesterday.

"Maryland poultry sales to Russia are off about 50 percent in recent weeks," said Errol Small, head of the state Agricultural Department's international marketing efforts.

On a national level, there have been reports of refrigerated shipments of chicken destined for Russia being turned back at sea or diverted to other destinations because of concern over the value of the declining ruble.

Although he could not provide specifics, Toby Moore, a spokesman for the U.S.A. Poultry and Egg Export Council in Atlanta, said the price of chickens dropped by half, or more, between the time the ship left the United States and arrived in Russia.

Moore said poultry exports to Russia are off, but the trade group has not been able to determine the rate of decline.

"This is a crisis of the past few weeks and we haven't been able to determine the full impact," he said.

Richard L. Lobb, a spokesman for the National Broiler Council, said Russian exports dropped when the value of the ruble went from 6.2 to the dollar in mid-August to 20 rubles to the dollar last week.

Lobb said U.S. poultry processors, including Salisbury-based Perdue Farms Inc., export 17 percent of their production.

Russia is the largest market, accounting for about 40 percent of total U.S. exports.

Moore said domestic processors shipped 932,753 metric tons of chicken products, valued at $729 million, to Russia last year.

The value of poultry exports from Maryland was $90 million last year, Small said. He estimated that 20 percent to 25 percent of that volume went to Russia. Russia is the largest market for Maryland's chicken exports.

Poultry accounted for about 36 percent of all state agriculture exports last year.

Small said that exports to Russia have been growing steadily since the early part of the decade, but he anticipates a drop this year.

As a result, Small said, the state Agriculture Department has begun working to help Maryland poultry processors find alternative markets for their products, such as in the Caribbean, Central America and the Philippines.

Industry officials are "guardedly optimistic" that the Russian market, which has grown steadily since 1992, will bounce back.

"This is not a demand thing," Moore said. "The demand is still there. It's a currency problem.

"It's a good market and I don't think it's going to go away," he said. "Russia can't produce all the food needed to feed its people. They need to import. It is just a question of when the economics are worked out."

Pub Date: 9/16/98

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