An agricultural economics professor with the University of Missouri says Russia's ban on food imports has had a minimal impact on North American live hog prices.
Last month, in response to sanctions imposed over the crisis in Ukraine, Russia banned certain food imports from Canada, the U.S., the European Union, Australia and Norway for a year.
Dr. Ron Plain, an agricultural economics professor with the University of Missouri, says we've seen a sharp decline in hog prices over the last two months but not a whole lot of that is due to the Russian ban but rather an increase in U.S. pork production.
Dr. Ron Plain-University of Missouri:
Most countries don't want to become too dependant on sales to Russia.
Russia is one of the most unreliable markets you can have.
When it suites them they often import a lot of ag products and if something upsets them they can as quickly ban purchases.
At times they're a big market but the U.S. hasn't had much luck in having sustained pork exports to Russia.
Russia, when they are in the market buying U.S. pork is usually looking for bargain prices, in essence low cost meat cuts is primarily what we've shipped them.
A related product, chicken, we've historically at times put a lot of leg quarters into Russia because it has been a very low cost meat source for them.
Dr. Plain says, despite the drop in live hog prices, North American pork producers have remained profitable and that's expected to last well into 2015, thanks in part to an abundance of low cost feed.
He anticipates a bounce off of the lows we've had in the last few days as we see demand hopefully start to pick up.
Source: Farmscape