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TUESDAY, March 3, 2015

Central Asia

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Kazakhstan launches major initiative to improve beef exports

By Martin Sieff
Herd of cattle

ASTANA - Tuesday, June 22, 2010 - This story is the first of a two-part series chronicling a major Kazakh initiative to improve the quality of its cattle herds and meat exports.

Kazakhstan has launched a major project with Global Beef of North Dakota to upgrade its cattle herds with 2,000 Angus and Hereford cattle.

Some 1,000 Angus cattle and 1,000 Herefords are due to be airlifted halfway round the world to the Central Asian republic in October and November.

The project marks the most ambitious and largest scale upgrade of the cattle herds of Kazakhstan and Central Asia in modern history.

It will have an enormous impact on improving the quality of beef that Kazakhstan farmers supply to their largest and most rapidly expanding long-term market in China.

The first livestock are due to be airlifted to Kazakhstan October 1, Farm and Ranch Guide reported from Bismarck, North Dakota on June 16.

Asylzhan Mamytbekov, the chairman of Kaz AGRO, Kazakhstan's main coordinating agriculture development, process and export corporation, announced the program during the Fourth Kazakhstan Investment Summit in Almaty on June 4.

The potential of the program is enormous. Kazakhstan's agricultural sector, especially its meat industry and cattle herds are on the brink of an enormous expansion. Kazakh government and agriculture leaders have the goal of supplying the rising meat needs of both Russia and China over the coming decades. Each of those two markets alone would be worth billions of dollars.

Julie Ellingson, executive vice president of the North Dakota Stockman's Association, told Farm and Ranch Guide that her organization was conducting six roundups across the state this month, with each district running its own program.

The airlift is part of a joint venture called KazBeef that is being run by Global Beef Consultants, LLC, and KazMeat, the main beef production corporation of Kazakhstan.

Global Beef is run by Bill and Dan Price, North Dakota State University animal scientist Dr. Vern Anderson, and international accountant and North Dakota producer Mike Seifert, reported Farm and Ranch Guide.

The joint venture is constructing a feedlot for 5,000 cattle and a new beef processing plant in Kazakhstan. Through 2011 and 2012, KazBeef is going to construct another 15 feeding sites in Kazakhstan to enable the Central Asian republic to export meats from the augmented herds as quickly as possible.

The Kazakh government is working to increase livestock agriculture and has set aside millions of dollars to develop cattle genetics and improve livestock technologies.

Kaz AGRO Chairman Mamytbekov told the investment summit in Almaty that his company had chosen the North Dakota-based company because it has experience operating efficiently in a harsh climate with extreme weather conditions similar to those of Kazakhstan.

"North Dakota has a harsh continental climate and it is as the same latitude with the same weather extremes that we have to operate in," he said.

Farm and Ranch Guide noted that operating costs to maintain large cattle herds are far less in Kazakhstan than in the United States. Urea, which is used in animal feed, can be purchased for only $20 per ton in Kazakhstan. Urea is imported from China, as it is in the United States. But since Kazakhstan shares a border with China, import costs are far less.

Kazakhstan is also one of the world's leading producers of petroleum, and unlike the United States, it consumes only a fraction of its own production. So fuel costs are far lower in Kazakhstan at only 80 cents for a gallon of gasoline. Kazakhstan also maintains complete free trade with no tariffs on imports, Farm and Ranch Guide noted.

Kaz Agro’s Mamytbekov told the investment summit that the purpose of the program was to rapidly expand, improve and restore the quality of Kazakhstan's breeding herds of cattle.

"We are trying to buy the best cattle breeds to upgrade our stock. We are investing in imports of Angus cattle. We are trying to expand our foundation, our basic breeding stock, he said.

"Kazakhstan is moving forward again. Agriculture has been secondary for many years in our economy and our planning priorities. It has lost a lot of its position compared to 30 years ago.

"In the 1990s, we were exporting 300,000 tons of meat a year. In today's market conditions that would be worth $1.5 billion to $2 billion per year.”

However, after the disintegration of the Soviet Union, the crisis-rocked Russian state could no longer afford to buy huge quantities of Kazakhstan's cattle. As a result, meat producing sectors of the economy went into a sharp decline for many years, the Kaz Agro chief said.

"We lost a lot of our stock. Quality has been downgraded. But now we are trying to export some of the best breeds of livestock and there is a lot of financing coming from the government to encourage the agricultural sector," Mamytbekov said.

Tomorrow’s story: Tackling the genetic and breeding challenge.

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