Russia has increased sharply its export of dry fodder to non-CIS countries: in 8M 2020, supplies to foreign markets amounted to 58 thousand tons, which is 16 times more than in the same period last year. By the end of this year, export shipments may amount to 65-70 thousand tons, according to the Center for Industry Expertise of the Russian Agricultural Bank (RusAg, the Bank). This will be an absolute record for this type of product – in previous years, supplies to foreign markets did not exceed 7 thousand tons. Moreover, as noted in the Center, the export of dry fodder is growing much faster than any other category of crop products.
“Russia has a significant resource base for expanding the supply of green fodder, including millions of hectares of land that are suitable, but not yet used for growing forage crops. Therefore, Russia’s potential in the export of such products is practically limitless”, - said Andrey Dalnov, Head of the Center for Industry Expertise at RusAg.
A third of the total volume of dry fodder produced in Russia is concentrated in 5 regions: Tatarstan, Bashkiria, Altai, Dagestan and Novosibirsk. Dry fodder is exported mainly from the Central Federal District, in particular, to the Voronezh and Oryol regions, which are the two main exporting regions, accounting for 50% of supplies in 2020.
According to Andrey Dalnov, when supplying dry fodder, as in the case of other crop products, small farms can take an active part in the export supply chain.
“The share of farms in hay making is constantly growing, and in 2019 farms accounted for more than a third of dry fodder,” – says Dalnov. RusAg traditionally has a special focus on small farms support. The Bank provides stable and affordable lending to farmers and allows them to raise funds both for investment purposes and for seasonal field work.
The volume of world trade of dry fodder is estimated at about 10 million tons, and the market is showing strong growth. Over the past 10 years, shipments have grown by more than 30%. The leading exporting countries are the USA, Australia and the EU. The top five importers are Japan, China, the United Arab Emirates, Korea and Saudi Arabia. The main consumers of Russian dry fodder today are Latvia, which accounts for 80% of the supply, and the Netherlands - 11% of the total volume.
RusAg’s Center for Industry Expertise notes that the world market for fodder crops is strongly influenced by non-market factors. Thus, for a number of regions without a historically established culture of milk production, the cost of transporting such a voluminous product as dry fodder can be significantly higher than the cost of supplying finished milk processing products from abroad, nevertheless, importing countries are ready to pay the costs for the development of their own animal husbandry.
“There is a protectionist policy on the part of those countries-importers of Russian dry fodder, which are not ready to give their market to our dairy producers. Thus, milk production is stimulated in those regions where agriculture has no dairy specialization and lacks the necessary resource base for this,” – concludes Andrey Dalnov.