POULTRY, RED MEAT LEAD SURGE IN US FOOD SALES TO RUSSIA

POULTRY, RED MEAT LEAD SURGE IN US FOOD SALES TO RUSSIA

The U.S. trade balance may be deteriorating, but exports of food to Russia are forging 33 percent ahead of last year's levels, with red meat and poultry leading the charge.

So popular are U.S. chickens in Moscow and St. Petersburg, especially chicken leg quarters, that Russia now buys over 25 percent of the entire U.S. production, and last year became the single largest market for U.S. poultry.The origins of the chicken export boom date back to the late 1980s and early 1990s, when Moscow began shopping for meat to satisfy rising demand. At the same time, U.S. poultry producers, with plenty of customers at home for white meat, were looking for new markets for leg quarters. The Russians happen to prefer the dark meat of chicken legs. "This was a match made in heaven," said a senior official at Agriculture.

So popular were U.S.-made chicken leg parts in Russia, Muscovites started calling them "Bush legs," after former President Bush.

Similarly, exports of red meat have risen dramatically to $65 million in the first four months of this year from $11 million in the same period of 1994.

A U.S. official pointed out that, although some pork exports to Russia have been subsidized to match European prices, "this program truly did lead to commercial sales. We did establish our presence in the market."

The meat export success contrasts sharply with the latest trade data released Tuesday by the U.S. Department of Commerce, showing the U.S. deficit on trade in goods and services widened to a record $11.43 billion in May from $11.42 billion in April.

The reasons for rising meat exports to Russia "are many, but low price is not among them," said Bob Koopman, chief of the Department of Agriculture's trade analysis division for Europe. "Where we compete with domestic producers and with the Europeans is in quality, packaging and marketing," he said.

Because price is a minor factor in Russian poultry sales, Mr. Koopman said he expects that Moscow's recent decision to impose a 20 percent import levy on food is unlikely to have a major effect on export levels.

Mr. Koopman said, although Russia's domestic output is likely to catch up with consumption sooner or later, "We're going to continue doing well there for another two to three years."

The decline in Russia's domestic meat production in recent years has resulted in a substantial drop in the import of U.S. cereals. Between 1993 and 1994, shipments, mainly of coarse grain and wheat, fell to one-fourth of previous levels.

As a result, total food exports to Russia plummeted to $638 million in 1994

from $1.2 billion in the previous year.

At the same time, poultry sales to Russia shot up to $310 million in 1994

from $83.5 million the year before. So far this year, the numbers are 83 percent up on the record-setting pace of the same period last year, having reached $167 million in the first four months of 1995.

That's good news for U.S. ports, especially in the heavy poultry-producing Gulf region, which is doing booming reefer business shipping meat across the Atlantic. Even mid-Atlantic ports of Philadelphia and Wilmington, Del., are getting a piece of the growing business.

Robert A. Giertz, director of international marketing for USA Poultry and Egg Export Council in Stone Mt., Ga. said Russia has surpassed Hong Kong and China for U.S. poultry exports.

He said Russia does not have enough feed to grow its own chickens, and will continue to depend on imports. But, he added, some U.S. producers are beginning to worry about the Russians' ability to pay.