Following Russia's 2014 import ban on agricultural products from certain countries, Russia's net imports of dairy products fell 29 per cent in 2016 compared to pre-ban levels, with the largest drop seen in cheese and curd. According to latest analysis by the Agriculture and Horticulture Development Board (AHDB) the ban wiped out over 230,000 tonnes of imports, equivalent to 53 per cent of the volumes previously imported.

However, consumption of dairy products has dropped since the ban, likely as a result of the rise in prices. Cheese and curd consumption has seen the largest drop, with consumption down 7 per cent in 2016 compared to 2013. Butter consumption fell by 3 per cent, with liquid milk down 10 per cent. Skimmed milk powder and whole milk powder consumption increased by 2 per cent and 7 per cent respectively.

While the Russian dairy industry has grown on the back of the embargo, it has not managed to completely replace import volumes as it continues to face a variety of challenges. Weaknesses such as a geographical imbalance of processing capacity, the requirement to transport milk across vast distances, the weak rouble and a squeeze on consumers' purchasing power have limited production growth.

However the Russian government is incentivising productivity and investment with targeted subsidies, investment credits and loans in order to support further growth. Foreign investors are also showing interest in accessing the undersupplied Russian market, with large investments from Chinese, Thai and Vietnamese companies in recent years.

Market round-up

C&D Auction Marts Ltd sold 7 prime heifers in Dumfries on Wednesday to a top of 223p per kg and an average of 192p, while a couple of prime bullocks peaked at 189p and levelled at 159p.

In the rough ring 37 beef cows sold to £1276.50 per head and 156p per kg to average 110p, while 50 dairy cows peaked at £991.60 and 134p to level at 87p.

The firm also sold 1433 prime lambs to a top of £88 per head and 190p per kg to average 165p (-3p on the week).

A large show of 770 cast sheep saw heavy ewes sell to £85.50 for Texels and average £53, while light/export-type ewes peaked at £68 for Cheviots and levelled at £36.

United Auctions sold 290 store heifers at Stirling on Wednesday to a top of 241.9p and an average of 201.9p (-3.4p), while 492 store, beef-bred bullocks peaked at 239.9p and levelled at 209.3p (+2.1p). Fifty-three store, B&W bullocks sold to 157.6p and averaged 138.6p (+0.9p), while 39 store bulls peaked at 243.2p and levelled at 205.2p (no comparison).