USSR: OUTLOOK FOR MEAT SUPPLIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00313R000300080005-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 11
• Document Creation Date: December 21, 2016
• Document Release Date: March 26, 2009
• Sequence Number: 5
• Publication Date: October 1, 1984
• Content Type: REPORT

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Intelligence
USSR: Outlook
for Meat Supplies
Confidential
SOV 84-10187
October 1984
458
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Directorate of Confidential
Intelligence
USSR: Outlook
for Meat Supplies
This assessment was prepared by 25X1
of the Office of Soviet Analysis. 25X1
Comments and queries are welcome and may be
directed to the Chief, Econometric Analysis Division,
SOYA, 25X1
Confidential
SOV 84-10187
October 1984
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USSR: Outlook
for Meat Supplies
Key Judgments Despite a poor grain crop, Soviet meat production in 1984 is almost certain
Information available to reach a new peak for the second consecutive year. Indeed, output
as of 4 October 1984 probably will exceed Moscow's goal of 16.8 million tons by several hundred
was used in this report.
thousand tons. With more than two months remaining in this year, the
range of our production estimate is still relatively wide-16.7 to 17.3
million tons-because of uncertainty concerning production of feedstuffs
and possible changes in Soviet livestock management policies. Our best
estimate of 1984 meat production, taking account of all risk factors, is 17.0
million tons-roughly 3 percent more than in 1983. This year's boost in
meat production is largely attributable to a record harvest of forage crops
last fall; a second consecutive mild winter, which reduced the demand for
feedstuffs; livestock inventories that are at an alltime high; and near-peak
grain imports.
Domestic production of 17.0 million tons, combined with probable net
imports of 900,000 tons, means a 2-percent increase in per capita
availability of meat in the near term, permitting the leadership to claim
some progress toward achieving Food Program goals. Nonetheless, contin-
ued growth of income-up 3 percent this year-coupled with unchanged
state retail prices probably will widen the gap between meat supply and de-
mand. The informal rationing of meat and lengthy queuing experienced by
consumers are likely to continue at least through next year, contributing to
worker apathy.
We estimate that meat production next year is likely to be between 16.7
and 17.7 million tons. Our baseline forecast-17.2 million tons-assumes
trend grain and forage crops and normal grain import and animal
husbandry policies. Meat production growth next year will be constrained
by the impact of this year's reduced grain crop and a forage crop that is not
expected to exceed the 1983 record. If our baseline estimates for 1984 and
1985 meat production and imports are correct, annual production for the
1981-85 Plan period will average over 9 percent above the level for the
1976-80 period. More important, the availability of meat per person for the
current five-year period would be 8 percent above the average for the
earlier period, reflecting recent high levels of imports.
Confidential
SOV 84-10187
October 1984
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Preface This report is the second of two DI assessments of Soviet agricultural
erformance in 1984. The firs
assesses Moscow's need or grain imports 25X1
during the marketing year that began on 1 July 1984. The assessment at
hand looks at the 1984-85 period using two complementary models of the
Soviet grain-livestock sector that use calendar-year data to explore pros-
pects for meat supplies and their implications for the leadership and
consumer 25X1
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USSR: Outlook .
for Meat Supplies
Introduction
Food accounts for nearly half of Soviet household
expenditures. Consequently, the quality of the diet-
especially the availability of meat-is a key criterion
by which Soviet consumers judge their well-being.
This assessment presents estimates of meat produc-
tion in 1984 and 1985, taking account of uncertainties
in the production of feedstuffs and possible changes in
livestock management policies. It then discusses the
implications of these estimates for the consumer and
the Soviet leadership. Meat output projections in this
study are based on two complementary models of the
Soviet livestock sector that rely on calendar-year data
only. One of these models (SOVAG) uses estimates of
grain output, other feedstuff availability, and grain
imports; the other (SOVMON) uses official data on
monthly meat production on state and collective
Background
During 1979-82, meat production lagged below the
1978 peak. Only by importing record quantities of
meat-about 900,000 tons (net) annually during the
1980-82 period-did Moscow maintain per capita
meat availability. Imports remained high in 1983 even
though meat production surged to a record 16.4
million tons.
Nonetheless, meat supplies continue to be very tight
in the USSR. This results from the lengthy period of
relative stagnation in the growth of meat availability,
steady growth in disposable income, and, perhaps
most important, the leadership's policy of maintaining
stable, relatively low prices for livestock products in
state retail stores, where most meat is sold. Conse-
quently, extensive queuing has imposed a serious
economic drain on workers' time and consumers'
morale. Local rationing and special distribution sys-
tems, however, have tended to shift some of the
problem from workers in higher priority sectors to
those groups such as pensioners and service workers
that are less able to protest effectively.2 The most
serious effect of limited meat supplies may be contrib-
uting to reduced growth of worker productivity. One
prominent Soviet economist has estimated poor work-
er morale caused more than half the slowdown in the
growth of labor productivity that occurred prior to
1983.
To constrain the growing excess demand for many
goods and services, Soviet officials have waged a
continuing effort to bring income into line with
supplies. This has been accomplished primarily by
slowing the growth in money incomes. In the case of
food products, however, special attention has been
given to increasing supplies. In May 1982, Leonid
Brezhnev announced a Food Program designed to
spur agricultural production and to reduce waste in
the production and distribution of farm products.' 25X1
Both Chernenko and his predecessor, Andropov, pub-
licly supported the central elements of the Food
Program. This program has been slow to get under
way and, therefore, will have limited impact on meat
production during the remainder of the 1981-85
period.'
Outlook for 1984 Meat Production
Meat production is almost certain to reach the plan
target for the second consecutive year. Indeed, output
probably will exceed Moscow's goal of 16.8 million
tons by several hundred thousand tons. Feedstuff
availability and Soviet livestock management policies
during the rest of the year can still affect the final 25X1
outcome. The range of possible production is 16.7 to
17.3 million tons.
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Even with the highly visible support of the Food
Program, meat production in the Soviet Union de-
pends upon many factors that introduce major uncer-
tainties into any estimate. The most important
sources of uncertainty are feed availability, feed
requirements, and policy decisions affecting the feed-
livestock sector. Policy decisions, such as those deter-
mining livestock feed rations, animal slaughter rates,
and the level of grain imports, can affect the stability
and trend of yearly meat production.
Feed Availability. Even with the 1984 crop season
nearly completed, uncertainty regarding grain pro-
duction remains. We estimate the grain crop will
come in at about 180 million tons-15 million tons
less than last year's estimated output and 25 million
tons below the average 1976-80 annual grain harvest.
Uncertainty about weather during the final harvest
period combined with uncertainties about total area
planted, the distribution among the various grains,
and possible late-season abandonment of grain area
suggests the grain crop could go as low as 170 million
tons or as high as 185 million tons.
The impact of weather conditions and other factors
on harvested roughages-hay, silage,. and so on-is
less pronounced partly because some of these crops
are harvested several times during the growing season
and partly because the harvest extends over a longer
period. We estimate total roughage availability this
year will be roughly the same as last year.
Feed Rations and Slaughter Rates. Choices regarding
feed rations (which affect the rate of weight gain) and
weight at time of slaughter as well as the rate of
monthly slaughter provide Soviet farms with some
flexibility in meeting annual meat production and
livestock inventory goals. In times of severe feed
shortages, plans for herd size and production of
can be and have been altered by central decision
In 1975, faced with a very poor grain crop, the Soviets
undertook distress slaughter of hogs and poultry.
This action reduced feed requirements and gave a
short-term boost to meat production, but it took its
toll in the longer term. Meat production dropped by
nearly 10 percent in 1976 and did not regain trend
levels until 1978. Similarly, it took two years for
poultry numbers and four years for hog numbers to
regain 1 January 1975 levels. Since 1977, the Soviets
have chosen to keep herds intact and growing even in
years of relatively constrained feed supplies and at
the cost of declining productivity.
We believe the emphasis on herd maintenance and
growth in recent years is evidence of a genuine long-
term Soviet commitment to provide the population
with more meat. Plans for 1985 indicate the emphasis
is shiftingfrom herd building to productivity in-
creases to reduce the high cost of production as well
as to increase meat output. This strategy will in-
crease the dependence of the livestock sector on
consistent availability of adequate feed supplies.
Meat production for 1984 is fairly well established,
barring a sudden, sharp increase in animal slaughter,
a highly unlikely event. Because the average slaugh-
ter weight of livestock has been increasing since about
mid-1982 and because livestock herds have also been
increasing, Moscow is in a better position than in
previous years to keep meat production increasing
despite feed shortfalls arising from this year's re-
duced grain crop. Growth in production for 1985 is
less assured, in part because the impact of lesser
overall feed supplies will be felt in the first half of the
year.
Grain Imports. Forecasting Soviet grain imports, in
general, is a risky business because although imports
are the major means of ameliorating a shortfall in
grain supplies, Moscow has other alternatives, such
as reducing feed rations. Our uncertainty about 1984
imports is small, however, because more than three-
quarters of the year is completed and purchases for
shipment during the rest of the year indicate that
scheduled imports are already at near peak demon-
Soviet grain imports for calendar year 1984 are
expected to be about 46 million tons. These imports
include 500,000 tons of rice and 2.5 million tons of
grain and flour purchased by Moscow for delivery to
client states. Direct grain deliveries to the USSR
during the first nine months of 1984 are estimated at
28 million tons, and scheduled shipments from. grain
exporters indicate that deliveries to the USSR during
the final quarter will be almost 15 million tons.
Imports at this rate will require Soviet grain handling
facilities to operate at peak level during October-
December, making it highly unlikely that imports
will exceed 46 million tons during the year.
t
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Figure 1
USSR: Indexes of Best Estimates of
1984, Key Inputs and Meat Production
higher than normal, meat production could reach 17.3
million tons:
Case, Grain Roughages Monthly Meat
Output Fed Slaughter Production
(feed units) Rates
Upper bound 185 287 Above 17.3
normal . _
On the downside, if the grain crop and the roughages
fed livestock were about 5 and 3 percent lower,
respectively, than our best estimates, but grain im-
ports and slaughter rates were unchanged, meat pro-
duction would only be about 16.7 million tons-
roughly 1 percent above output last year.
Implications for the Consumer
If meat production reaches our best estimate and
Nongrain
feeds
fed
The growth in meat production this year is due largely
to a record harvest of forage crops in 1983; a second
consecutive mild winter, which reduced the demand
for feedstuffs; livestock inventories that are at an all-
time high; and near-peak grain imports. Our baseline
estimate of meat production-17.0 million tons-
reflects these factors and a 180-million-ton grain crop
(15 million tons less than last year's estimated harvest)
and no change from the record 1983 level in rough-
ages fed livestock (figure 1)
Bounding This Year's Best Estimate
Because of uncertainties about the weather and other
factors affecting feed availability and about Soviet
policy during the rest of the year, our best estimate of
meat production is bounded. In particular, if both the
grain crop and roughages fed livestock were some-
what greater than we currently estimate, grain im-
ports were unchanged, and the monthly livestock
slaughter rates for the rest of the year were somewhat
meat imports are maintained at last year's level, per
capita meat availability could increase 2 percent
(figure 2). Because actual per capita meat consump-
tion in the USSR is low and only slowly improving
compared with that in the United States and even
Eastern Europe, consumer discontent with the state of
meat availability is unlikely to disappear soon. Even
with record meat production this year, the informal
rationing of meat and lengthy queuing experienced by
consumers are likely to continue at least through next
year, contributing to worker apathy.
The degree to which gains in total Soviet meat
availability this year are being translated into gains
for the consumer is not clear. Last year, with both
meat production and imports at new highs-up nearly
7 and 6 percent, respectively-per capita meat avail-
ability could have risen by about 6 percent. Officially
reported per capita meat consumption (including
slaughter fat), however, increased only 2.5 percent,
suggesting Moscow may have replenished low inven-
tories of meat. With a lesser increase in supply
expected this year and with rebuilt inventories, all the
gain may go to consumers.
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Figure 2
USSR: Per Capita Meat Availability,
1970-84
0 1970 75 80 81 82 83 84
Note:The figures for 1970-83 are officially reported and those for 1984 are
estimates. Soviet official statistics on meat production are adjusted to conform
to Western definitions (trim, including slaughter fat and bone is removed). The
figure for 1984 assumes meat production of 17.0 million tons and meat imports
Implications for the Leadership
The leadership apparently realized that maintaining
meat consumption was crucial after worker protests
linked to meat shortages occurred during the late
1970s and early 1980s. Moscow boosted net meat
imports from about 150,000 tons in 1978 to 780,000
tons in 1980 and to about 900,000 tons in 1981 and
1982. This increase maintained per capita meat avail-
ability despite the stagnation of meat production
during 1978-82. Even with the 1983 recovery in
domestic production, meat imports continued to in-
crease to a record 960,000 tons. This policy cost the
Soviets over $300 million in hard currency in 1983
alone.
One of the goals of the Food Program is to ensure a
more varied Soviet diet while reducing dependence on
the West for grain and other agricultural imports.
Increased Soviet hard currency purchases of grain
alone in 1984 will cost Moscow $1.5 to $2.0 billion
more than it paid last year. Reduced purchases of
other agricultural goods, however, will partly offset
the cost of increased grain imports
Outlook for 1985 and the
11th Five-Year-Plan Goals
Soviet policies toward agriculture, weather-related
fluctuations in crop and livestock product output, and
availability of adequate supplies of viable seeds, vari-
ous chemicals, and equipment all add uncertainty to
estimating meat production in 1985, as indeed they do
in each year. Considering a reasonable range of
possibilities-including a mediocre 1985 grain crop-
the range for 1985 meat production is 16.7 to 17.7
million tons.' Our baseline forecast for 1985 is 17.2
million tons-slightly above that for 1984. This fore-
cast assumes trend growth of grain production and
availability of nongrain feedstuffs, grain imports of 35
million tons, small growth in herd size, constant
feeding rates, and normal monthly livestock slaughter
rates. If our baseline estimates for 1984 and 1985
prove accurate, annual meat production for the 11th
Five-Year Plan will average more than 9 percent
above the level for the 10th Five-Year Plan period
(figure 3) but about 6 percent short of the planned
target. Assuming meat imports of 900,000 tons in
1985, meat availability per capita would remain
unchanged next year, although the annual average for
the 1981-85 period would be 8 percent above the
average for 1976-80.
'This range in 1985 meat production is based on a plus-or-minus
6-percent range around our baseline estimate for aggregate feed
supplies and on a small range around our baseline rate of growth in
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Figure 3
USSR: Indexes of Five-Year- Plan Performance for Key Inputs
and Meat Availability, 1981-85a,
40
40
40 40
20
20
20 20
0
1981-85b
0
a Average annual levels.
b Estimated figures for 1981-85 assume baseline grain output, grain and meat
imports, and meat production for 1984 and 1985.
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