Russia sets sights on Australian sheep to boost lamb production

GAP Resource, one of Russia’s largest meat producers, has opened its first sheep farm in Rostov Oblast, southern Russia, in order to deliver more lamb products to the local market, according to information posted by the company on a local recruitment website, HeadHunter.

This is the third time during the past year that an agricultural holding in Russia has revealed its intention to pump money into the lamb business – a sector that has stagnated in the country for nearly 25 years, due to lack of investment and poor consumer demand.

Meanwhile, major Russian meat producer Miratorg recently announced that it was planning to build a large farm for 30,000 head of sheep in Kursk Oblast, with plans to have it up and running by April 2018.

In addition, Russian turkey and duck meat producer Eurodon CEO Vadim Vaneev, speaking at a press conference in mid-2017, revealed plans to invest RUB20 billion ($330m) into a major lamb farm in Rostov Oblast, with a planned capacity of around 15,000 tonnes of product a year.

Assessing the market​

Both Miratorg and GAP Resource have started trial projects to better assess the level of consumer demand in the domestic market.

Miratorg has promised to build nine more sheep farms during the next few years, as well as construct a meat-processing plant with a minimum capacity of around 1.5 million sheep per year, if the operation of its first farm is successful. Miratorg has estimated the price tag of the entire project at some RUB20bn ($330m).

The Russian companies aim to study not only the domestic market, but also the potential to export lamb products. Albert Davleyev, president of Russian consulting agency Agrifood Strategies, told local newspaper Kommersant​ that GAP Resource could be interested initially in exporting halal lamb to the Middle East, where this type of meat is popular. The company already has well-established export channels for halal chicken and could simply expand the range of products offered, he said.

Imported breeds​

However, to achieve their plans for lamb, Russian agricultural companies would need to import breeding sheep, as domestic breeds have a poor production record. For example, Mikhail Egorov, director general of the National Union of Sheep Breeders, noted that Miratorg planned to work with the Dorper breed, imported from Australia.

In a statement posted on its website on 12 February, Russian veterinary watchdog Rosselkhoznadzor said it would allow imports of sheep and goats from Australia, with this decision giving Miratorg the green light to deliver the first 16,000 animals to its farm.

Viktor Linnik, president of Miratorg, revealed that the company had originally planned to import these animals during autumn 2017, but had had to postpone the shipment, as it was unable to find the required number of sheep in Australia.

In the meantime, Dmitry Rylko, general director for the Russian Institute of Agricultural Market Studies, commented that opening up imports of sheep from Australia could bring benefits to other agricultural holdings interested in developing lamb projects in Russia.

Russia produced 210,000 tonnes of lamb in 2016, according to information from the Ministry of Agriculture. Up to 90% of sheep in Russia were kept in small backyard farms, the ministry estimated. Consumption of lamb in Russia stood at 1.2kg per capita or just 2% of the total meat consumption of an average Russian citizen, according to the ministry.