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News and analysis on the global poultry
and animal feed industries.
on October 22, 2008

Growth in Russia’s poultry industry pushing DDGS demand

The livestock and poultry industries in Russia are growing “very rapidly,” according to Alex Kholopov, U.S. Grains Council consultant in Russia. The substantial growth is due, in large part, to the government’s decision to make agriculture a national...

Prior to the government’s focus on agriculture, it was nearly impossible for livestock and poultry operators to borrow money for longer than a year, said Kholopov. Today, he said, the Russian government has afforded the industries with loans for up to eight years with zero percent interest.

“We are now seeing Russia’s poultry industry grow 16% to 18% annually. It is the fastest-growing agricultural industry in the country,” Kholopov said. “At the same time, Russia’s swine industry is in a transformational phase. This industry was previously very small with operators only feeding a few hogs at a time. We are seeing that trend shift to a more modernized industry similar to the United States.”

Kholopov said the swine industry has doubled in two years and will likely continue to grow at this pace, increasing the likelihood of the industry to consume nearly all domestically-produced corn. As a result, leaders in Russia’s poultry industry are looking to U.S. distiller’s dried grains with solubles, a co-product of U.S. ethanol.

Dmitry Lvovich, assistant to the general director of OGO Group, one of the top three companies in Russia in terms of elevator capacity, livestock feed output and poultry production, attended the U.S. Grains Council’s International Distillers Grains Conference (IDGC) in Indianapolis, Indiana, recently.

“I am here (IDGC) looking for the right supplier of U.S. DDGS to establish a long-term relationship,” said Lvovich. “I am convinced of the value of DDGS as a feed ingredient due to the U.S. Grains Council providing educational seminars in Russia. Just as importantly, my company was looking for economic justification for using distiller’s grains, and after the Council brought consultants to Russia a few months ago, we found the co-product to be very price competitive.”

Lvovich said when a reliable supplier is identified, OGO will work vigorously to get the U.S. company registered to export DDGS to Russia. He said the biotechnology registration process typically takes one year, but he is hopeful the process will only take a few months. When the registration is complete, Lvovich said OGO will be turning to the council for technical assistance.

“We will need to know how to efficiently and effectively feed the product,” he said. “We are particularly interested in the nutritional components of distiller’s grains. We foresee other companies following our lead and incorporating DDGS into poultry rations in the near future. Much promotional efforts are needed right now.”

Currently in Russia, the livestock and poultry industries utilize 18 million metric tons of feed ingredients with 60% to 70% going into poultry rations. Kholopov said Russian poultry operators will likely include DDGS into rations at 7% to 8% initially.

“I anticipate the Russian poultry industry will import approximately 500,000 metric tons of U.S. DDGS within the next two to three years,” Kholopov said.
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