Russia Extends Ban of U.S., EU Dairy Products
Vladimir Putin, Russia’s President, last week extended his country’s ban of dairy imports from the United States and the European Union (EU) through 2020, reports the Dairy and Food Market Analyst newsletter.
The ban was first instituted in 2014 after the U.S. and the EU sanctioned Russia for its invasion of Ukraine immediately following the 2014 Olympics.
Russia had been importing huge amounts of cheese from Europe, and that cheese then ended up on world markets, causing prices to crash. At the same time, the EU had just lifted quotas on milk production which had been in place since the 1980s.
The combination of increased milk production in Europe and lower cheese sales resulted in Europe creating huge stockpiles of milk powder, which hung over markets for the next four years. Those stockpiles were finally eliminated this past winter, and is one reason world dairy prices have risen.
Many analysts believe the Russian trade sanctions were the beginning of the five-year downward dairy price spiral, which has only now begun to reverse.