RUSSIA-HE WHO PAYS THE PIPER.
As the representative of the U.S. poultry industry in Russia, Jim Sumner says he has heard it all.
Some Russian government officials, caught up in the throes of nationalism, have accused American poultry producers of trying to annihilate domestic production. Russian media reports have accused the producers of exporting only bird parts that have been injected with hormones.
If that weren’t enough, Russia is the only market in the world that requires its own veterinarians to annually inspect every chicken plant and cold storage facility exporting to Russia —- and there are more than 400 of them in the United States alone.
"We’ve been bashed in this market for as long as I can remember," said Sumner, the indefatigable president of the USA Poultry & Egg Export Council in Stone Mountain. "We have to spend a good amount of our time defending ourselves."
Why do producers put up with it? Because they need the market.
For years, Russia has been America’s largest customer for chicken exports. In 2008, it bought more than $800 million worth of U.S.-raised broilers, nearly a fifth of the $4.2 billion worldwide export sales of all American poultry products combined.
Russia’s purchases of broilers were more than double China’s and were more than those of Canada and Mexico combined, according to the U.S. Department of Agriculture.
Poultry producers in Georgia, the No. 1 poultry-producing state, want it to stay that way.
But with rising Russian domestic production —- buoyed by growing nationalism —- maintaining market share isn’t easy.
"We have 78 percent of the market for imports right now, but we know that Brazil and the European Union would like some of that," Sumner said.
That’s why Sumner joined more than two dozen U.S. companies in the poultry business —- about half of which were from Georgia —- in Moscow last week to attend Prodexpo, the largest specialized agricultural food and seafood show in Russia and Eastern Europe.
Thousands of buyers roamed the cavernous Prodexpo showroom, examining everything from Polish cheese to French sausage to Canadian beef to Brazilian pork.
At many of the stalls, free samples were handed out by tall, leggy blondes whom the Americans called "booth babes."
Representatives of the U.S. poultry industry staffed a pavilion beneath a huge inflatable chicken that hovered overhead like a balloon in the Macy’s Thanksgiving Day parade.
Larry Wisdom, director of business development at Interra International, a poultry trading company in Atlanta, said he has been coming to the show for years.
"I think we will sell less here as time goes on, but it will be at least another generation before Russia is self-sufficient in poultry," he said. "The good news is that other markets such as Vietnam’s market are emerging and are ordering steady amounts of poultry."
Saher Rizk, managing director of Mirasco International Food Merchants, another trading company in Atlanta, said Russia accounts for about 30 percent of his company’s business.
"Russia’s market is of paramount importance to us," he said. "Brazil is perhaps our one big competitor, but they sell mostly whole birds, where we sell more parts.
"We hope to supply more product as time continues," he said.
U.S. beef producers also were well represented at Prodexpo.
"There’s uncertainty in the economy right now, and so Russians are not eating so much beef any more in order to save money," said Yuri Barutkin, representing the U.S. Meat Export Federation, based in Denver. "But our beef from places like Texas and Kansas and Nebraska has a unique taste.
"It’s corn-fed beef and it is a bit juicier, and people here like it," he said.
The strong taste for American poultry in Russia began after domestic production fell precipitously following the collapse of the Soviet Union.
In fact, after the first Bush administration pushed exports in the early 1990s, Russian consumers began calling the imported chicken parts "nozhki Busha" or "Bush legs." The name has stuck ever since.
Unlike Americans, who like breast meat, Russians prefer dark chicken meat, particularly the leg parts.
"The Russians saw our huge leg quarters and couldn’t believe it, because they were actually bigger than their entire chickens," Sumner said.
By the 1990s, U.S. producers were supplying 90 percent of the chicken in Russia.
But over the past few years, Russia has been rebuilding its domestic chicken production, which has been growing by about 15 percent to 17 percent each year.
As a result, Russia has negotiated a 2009 U.S. poultry import quota of 750,000 tons, down from 931,500 tons in 2008.
Sumner, whom colleagues call a "mad genius," said he walks a fine line trying to both appease Russian government officials and keep the market open to U.S. poultry producers.
Often, the development of trade is slowed by political issues.
Last summer, for example, upon inspection of U.S. plants, Moscow barred at least 19 U.S. poultry producers from sending their exports to Russia.
Although Russia denied the move was political, the decision came after U.S.. criticism of Russia’s war with neighboring Georgia.
Sumner said he also continues to seek new forms of cooperation to prove the United States is not out to kill Russia’s domestic production.
A U.S.-Russia joint venture created in 1998, the Elinar Broiler poultry plant just outside Moscow, has been wildly successful, making a $20 million profit last year.
"You never know what’s going to happen with any given market, which is why it’s good to diversify," Sumner said.
Toward that end, he said his organization is focusing on other markets such as China.
Such markets have grown increasingly important in light of an EU ban on U.S. poultry since 1997 that has shut off a market worth at least $200 million.
It was put in place by a food safety regime that doesn’t allow low-concentration chlorine washes on raw chicken.
Despite lobbying from the U.S. government, it doesn’t appear that Europe is likely to lift the ban.
Sumner said the council has 13 foreign offices designed to keep overseas markets open, including the one in Russia.
"It’s not easy to do business here," Sumner said. "But if it were, everybody would do it."
