Russia’s imposition of a ban on most food imports from the West should have minimal effects on Louisiana agriculture because Russia has been a relatively minor customer for most U.S. agricultural products, LSU AgCenter economist Kurt Guidry said Thursday.
But officials with the World Trade Center in New Orleans noted that Russia is a key market for Louisiana poultry farmers and the ban hampers the potential for Russia to be a bigger market of Louisiana farm products.
The U.S. and European Union have accused Russia, which annexed Ukraine’s Crimean Peninsula in March, of supplying arms and expertise to a pro-Moscow insurgency in eastern Ukraine and have responded by slapping sanctions on Russian individuals and companies.
The food import ban, announced Thursday by a somber Russian Prime Minister Dmitry Medvedev at a televised Cabinet meeting, covers all imports of meat, fish, fruit, vegetables, milk and milk products from the U.S. and Canada; all 28 EU countries, plus Norway; and Australia. It will last for one year.
That retaliation, however, could hurt Russia as much as the West. With the inclusion of Ukraine, most of whose food products also have been banned, Russia has now cut off 55 percent of its agricultural imports, including about 95 percent of its imported milk, cheese and yogurt.
In 2013, the EU exported $15.8 billion in agricultural goods to Russia, while the U.S. sent $1.3 billion in food and agricultural goods, including about $300 million worth of poultry. Russia accounts for about a tenth of EU agricultural exports, its second-largest market after the United States.
Louisiana was ranked 20th in terms of states sending exports to Russia, according to officials with the World Trade Center in New Orleans. Texas exported the most commodities to Russia, sending nearly $1.85 billion worth of products in 2013.
While the value of Louisiana exports to Russia topped $281 million in 2013, a 41 percent increase over the year before, the value of exports is actually down 16 percent for the first half of this year.
Louisiana’s agriculture and food exports to Russia reached $117 million in 2013, a 35 percent increase from 2009. That’s small compared to the total $15.8 billion in agriculture products and $4.7 billion in food and kindred products Louisiana exported worldwide in 2013.
Russia is Louisiana’s second-largest market for poultry exports at more than $40 million in 2013. Trade Center officials said it was a growing market for Louisiana condiments and sauces, and the sweet potato industry was beginning to look into export opportunities there.
“Our loss of exports to Russian is a concern, but the ripple affect it will have on global markets is a larger one,” said Jerry Hingle, World Trade Center board member and chair of its agriculture committee. “They also cut out imports from the European Union, Canada and Australia — all important markets for the U.S. that are now facing excess supply and scrambling to find alternative export markets. It won’t be long until our exports to these markets are squeezed.”
Guidry noted that even though Russia was a large consumer of American poultry and beef, there is still more domestic consumption than export demand.
“While there may be some short-term effects to poultry and livestock prices, my guess is that the impact will be minimal and likely short-lived,” he said.
Washington dismissed Moscow’s ban as trivial to the U.S. but destructive to Russia’s own population.
“What the Russians have done here is limit the Russian people’s access to food,” said David Cohen, the U.S. Treasury undersecretary in charge of economic sanctions. He said the U.S. is ready to impose more sanctions against Russia if it doesn’t de-escalate the conflict in Ukraine.