Russian embargo bad news for dairy, says Bega Cheese chairman

Bega Cheese executive chairman Barry Irvin

Bega Cheese executive chairman Barry Irvin

EXECUTIVE chairman of Bega Cheese Barry Irvin said the Russian decision to ban agricultural exports including dairy is bad news for the global dairy industry. 

Russian Prime Minister Dmitry Medvedev told a government meeting on Thursday "Russia is introducing a full embargo on import of beef, pork, fruit and vegetable produce, poultry, fish, cheese, milk and dairy products from the European Union, United States, Australia, Canada and Norway".

The ban is in response to limited sanctions imposed on Russia following the downing of Malaysia Airlines flight MH17 by pro-Russian separatists.

Australian farmers will feel the effects of the sanctions. 

Australian beef exports to Russia were worth $159 million in 2013, butter exports accounted for $64 million, live animals excluding seafood accounted for $55 million and meats excluding beef were worth another $48 million.

“It doesn’t affect Bega Cheese in the immediate term too much as we only had very small volumes of product going to Russia and the year ahead was projected to be even smaller than the last,” he said. 

“However this is extremely bad news for the dairy industry.

“Russia comes after China as the main dairy importer globally, importing just under 13 per cent.

“Closing off markets to Australia, the European Union and the US means the market will be flooded with product that needs a home.

“It’s not like you can turn off the cows, this production will still happen and it needs to go somewhere.

“Global dairy prices are going to be affected and obviously this will ripple to Australia.

“The only two good things in this, and good’s not really the term you can use, are that New Zealand has not been included in this ban and within the Russian ban dairy products destined for children and infants are excluded.

“However, really there is nothing good in this for us and if this ban holds there is going to be some substantial rebalancing in the global dairy industry,” Mr Irvin said.

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