European farmers, who in 2013 produced some 438,000 tonnes of cheese for the Russian market, are expected to have an already falling milk market pushed down further. Meanwhile, alternative dairy markets are being sought by Russian importers. This is UK levy-board DairyCo’s message which has warned of the ‘market disruption’ likely to result from 33 per cent of Europe’s cheese export market being jeopardised. Within Russia, a leading dairy economist has said that Russia will find it ‘impossible’ to replace high-end artisan cheeses, referencing French produce, but that mid-price segment cheese will be more readily substituted.
New sources will be Argentina,Uruguay and New Zealand
This is Russian dairy markets analyst Tatyana Rybalova’s summary of Russian sourcing options for cheese this week. She sees Russian dairy foods prices jumping 12-15 per cent by the end of 2014 due to the embargoes. She has predicted cheese values to be the first to lift.Contrastingly, DairyCo has forecast European produce to be discounted at an attempt to counter preferential access of geographical benefits enjoyed by suppliers of other cheese markets. Explaining why accessing new markets will be difficult, DairyCo said: “Only six of the 20 largest cheese import markets are outside of the EU-28, and one of these is Russia.“In the markets large enough to offer significant export opportunities, the EU-28 does not currently have enough of a competitive advantage to displace other imports”
Russia’s import option: Switzerland?
However, DairyCo is doubtful of Russian cheese demand being satisfied under the new regime, listing Argentina’s economic woes and New Zealand’s uncredited processing facilities as reasons why. It added that neighbouring Belarus neither produces the quantity or quality of cheese to be useful to Russia, which will struggle to increase domestic production. This is in line with US Department of Agriculture comments on the economic struggle Russian dairy farmers are facing.“The financial situation of Russian dairy farmers continues to limit growth and milk production has been declining over the past decade,” DairyCo summarised.
Swiss Solution: Switzerland’s EU independence makes it a clear solution to Russia’s high-end cheese needs, market experts say. Swiss company Intercheese has been approached for its Mozzarella, Gouda and Edam, according to DairyNews Russia. Swiss Farmers Union director Jacques Bourgeois said increasing cheese shipments was likely given the import ban, singling out Gruyere sales as a possible beneficiary.
Michael Priestley, Editor The Cattle Site
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