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In the tension-filled game of chicken between Russia and the West over Ukraine, U.S. poultry is one of the big losers.
Russia on Thursday announced it will ban fruit, vegetables, meat, fish, milk and dairy imports from the United States, the European Union, Australia, Canada and Norway. The move comes after President Vladimir Putin signed a decree ordering the government to ban or limit food imports from countries that imposed sanctions on Moscow for its support of rebels in eastern Ukraine and the annexation of Crimea.
High on the list of banned meat is chicken. Poultry has been a bone of contention between the U.S. and Russia for years, ever since the first Bush administration sent flocks of chickens to Russia as food aid in the early 1990s. To this day, Russians call chicken leg quarters from the U.S. "Bush legs."
According to the U.S. Department of Agriculture, Russia accounts for about 8 percent of all U.S. chicken exports. Previous bans, usually citing health concerns about how American chickens are produced, have occurred at times of strained relations between the two countries.
Chicken producers, who have been through this before, have been rushing to line up alternative buyers, according to Reuters.
Among the other losers and winners are:
- The average Russian consumer is going to be hit by rising food costs, as the Kremlin acknowledged. It will take months or maybe years for domestically or EEU-produced goods to replace those banned under sanctions. With inflation already at 7.9 percent in the first half of 2014, purse strings will have to tighten.
Norwegian fish industry -- Russia imported close to $1 billion worth of Norwegian salmon last year – which is why Oslo stocks like Marine Harvest, down 10.3 percent and Leroy Seafood, down 7.4 percent, dropped as soon as the new sanctions were announced Thursday.
Polish fruit farmers -- Poland has been one of the most vocal critics of Russia in recent months, despite the potential economic consequences. Polish newspaper Puls Biznesu has already started a: "Stand up to Putin: eat apples, drink cider" campaign to try and replace the close to 700,000 apples a year Poland exports to Russia. Polish celebrities have taken to social media like Twitter to post pictures of them eating apples in support of the local industry.
Serbian pork farmers -- For the next couple of years, not being a European Union member (yet) may play in the favor of Serbia's agricultural industry as a whole. The country has "strong historical and trade relations with Russia" as Tim Ash, head of emerging markets research at Standard Bank, pointed out. And with formerly popular Canadian and EU pork off the menu, Serbian ham could appear on more Russian plates.
Belarussian cheese makers -- Belarus is the world's fourth biggest exporter of cheese, and that could be about to get more lucrative now Russians won't be able to get hold of French brie. The country is part of the fledgling Eurasian Economic Union, Russia's attempt to mimic the European Union trade agreements, which will officially begin in January.
- Armenian fruit/vegetable exporters -- Food counts for half of this ex-Soviet state's manufacturing output, with grains, potatoes and grapes particular specialties. It also may need extra funds if the conflict with neighboring Azerbaijan continues to escalate.
Russia's own agricultural industry, despite plenty of land to farm, hasn't performed particularly well since the Soviet era, as farms struggled with the move from collective farming to a more capitalist system, and young rural Russians moved to cities in droves. The country imports close to half its food.
One notable omission from the sanctions list is alcohol, which may be a relief to international drinks companies like Heineken – and to Russians wanting to drown their sorrows.