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Russia's Market for Meat Products
25 February 2015
Russia's Market for Meat Products

This article was published as part of USRCCNE's free monthly newsletter.

 

Russia's Market for Meat Products

Alexander Skrinnik, owner of an online meat store, explains to The Village, a Russian-language Internet publication, how governmental sanctions affect the Russian meat market and whether it is possible to buy good meat in Russia. 

This translation has been sponsored by USRCCNE.

 

What Determines Meat Quality

Raising cattle is an expensive and labor-intensive process. For example, raising one bull requires 300 tons of water. The vast difference in price of different cuts of meat received from one animal makes it difficult to recover the invested costs. A bull weighing 1000 kilograms has approximately 30 kilograms of truly premium meat; the rest is significantly cheaper, alternative cuts. This means that premium cuts must pay for the rest of the carcass. Popular cuts, such as rib eye, short loin and strip loin sell fast, therefore suppliers like to import it. Other cuts are more difficult to place, even though they are cheaper and are of comparable quality, and should be used!

Alternative cuts have shapes not convenient for retail sale. You would be greatly surprised if after placing an order in a restaurant, you and your friend would receive steaks of different shape. Expensive cuts of beef, such as rib eye, are easy to cut into equal portions. Alternative cuts may have prolonged or triangle shape, perhaps with a tendon running through the middle. These require greater butchery skills. The cost of such a cut is many times lower than rib eye or sirloin.

The quality of meat is mainly determined by two factors: the breed of cattle and its feed. Certain breeds are more prone to creating marbling: if the bull is grain-fed and limited in its activity for most of its life, it will consume more calories than it is able to use, will grow in mass and produce fat marbling through the muscles which will make its meat especially juicy and tender when cooked. There are also classic methods of fattening when an animal is fed predominantly by grass and it creates a layer of fat around muscles. This method of fattening is highly prized in Europe and Latin America. It is more ecofriendly, grass-fed meat is leaner, with lower fat content. Americans and Australians prefer grain-fed beef.

The longer a bull is grain-fed, the more expensive its meat. Every meat producer can choose how long the animals will be grass-fed and grain-fed. Thus, walking into a steakhouse, you can order a meat of specific breed and determined length of grain-feeding, from 60 up to 300 days. When a producer does not have a specific plan and he agrees to fulfil fast orders, instead of doing everything step-by-step and in order, he skips important stages, shortens fattening time or tries to feed cattle as much as possible in the shortest time. At times, producer gives up lengthy meat curing time after butchering. This results in a decreased quality of the meat.

 

Specifics Of Working In Russia

When we came up with an idea of Baranienbaum, we wanted to popularize the culture of cooking steaks and offer to the public a high quality meat currently available only to restaurants. Gradually it transformed into an idea that we will take upon ourselves all the work for selecting the tastiest meat for steaks from what is available on the market so our clients do not have to waste their time and money, and can receiving the best quality. Three years ago, when we first started our store, we worked exclusively with US imports because at that time they supplied up to 80% of high quality marbled beef to Russia. We had good price offer and stable delivery quality. But half a year after our opening, the import of American beef into Russia was banned. All suppliers that worked with this market refocused on Australia and New Zealand. Meat prices rose.

It took us six months to build connections with Australian meat producers, we worked with them for another half a year, and then came another ban – now for Australian meat imports. It was accompanied by terrifying stories by Rosselkhoznadzor (Federal Service for Veterinary and Phytosanitary Surveillance) telling the public that imported meat is harmful and unsafe. We had to explain to our clients that true reasons of the ban are not in poor quality of the meat. During our third year, an "everything" ban was announced so that we didn’t have to explain anything to anybody anymore, everybody understands. Currently we mostly work with Argentina and Uruguay; gradually we will also include Russian meat producers. We continue to search for the best of what is available to us right now.

 

How Bans Affect The Market

Imagine how a regular meat producer works: he negotiates contracts with suppliers that stipulate how much meat of a certain quality they will purchase from him in the next year. It allows him to plan for a year ahead and raise specific number of cattle for specific date for the certain customer. If a customer cancels the purchase, it deals a serious blow to the producer’s business. Stability is extremely important in meat production. It is impossible to raise a cow urgently “made to order” with meat of proper quality.

When suppliers work with meat producers for many years, they begin to trust each other, delivery costs decrease, both sides gain the ability to create certain conditions and choices. However, when these connections are constantly disturbed and vendors have to keep looking for new producers and logistics channels, deliveries become very expensive. Those who first import any meat after yet another ban want to recoup their costs and to make a profit on the created deficit, so they increase their prices.

Many meat producers offer meat of different quality at the same time. Due to the falling ruble, Russian importers now purchase meat of lower quality than before so their clients (restaurants and stores) can afford to purchase it from them. Speaking conventionally, restaurants cannot re-write their menus every day; they have to daily sell steaks at a certain price; the quality of the meat is a secondary issue. The same applies to stores: they have to have the volume, an affordable price and matching names of cuts, and nobody will taste and seek out the best-flavored meat. Customers, out of a habit, believe that meat from Australia is better than that from Uruguay. So now we see a paradox situation on the Russian market: an expensive Australian meat of a lower quality is often valued more highly than tastier and cheaper meat from Uruguay. Determining the quality of the meat based on its geographic source is completely incorrect. Just as with wine, different regions have their own characteristics, but tasty and high-quality meat or, on the other hand, dry and tough meat can come from any region.

 

What About Russian Producers?

Currently Russian meat of a quality equal to that coming from Uruguay costs 30% higher than Uruguay meat. So, for now, due to a disadvantageous price-quality ratio, I purchase meat for Baranienbaum abroad. At the same time, it is obvious that truly good local meat producers have started to emerge in Russia over the past few years. The problem is that due to the small amounts available, their meat is in excessive demand on the market.

Striving to satisfy all demands, meat producers may choose to increase volume and decrease the quality of their products. It happens when salesmen become more important in the production than the manufacturing technicians. If a new order comes in, they will sell the meat even if it is not yet ready. Quality of Russian meat deliveries is not very stable right now, meat producers often do not follow requirements for fattening durations of cattle. When the Russian market gains local producers of quality meat and restaurants ready to work with alternative cuts of meat, it will allow us to eat good quality meat at affordable prices.

 

 


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