Reported reductions in Russia's meat and poultry import quotas and a proposed auction system reflect "seasonal political maneuvering" or signal a structural change to the country's export markets. Either way, it's not a good sign for U.S. chicken exports, BMO Capital Markets analyst Ken Zaslow said in a note to investors.

According to press reports, import quotas for beef, pork and poultry will change in the next three years. Meanwhile, Russia proposed creating a system whereby it will auction 30 percent of its quotas.

Poultry quotas in 2010 are projected to amount to 780,000 metric tons, compared with 931,000 metric tons in 2009. In 2012, poultry quotas will be reduced further, to 550,000 metric tons. Pork quotas gradually will be lowered to 450,000 metric tons, from 500,000 metric tons. Beef quotas, meanwhile, are expected to hold at 530,000 metric tons.

Zaslow said implications for U.S. chicken companies would be increased price sensitivity related to leg prices due to increased competition from countries including Brazil and China, as well as reduced U.S. chicken exports to Russia.

"The question is, is this typical seasonal political maneuvering by Russia or is it the initial sign of a structural change to the Russian export markets?" Zaslow wrote. "While we can make a good case for both sides of the argument, we believe this is an incrementally negative sign for the long-term outlook for U.S. chicken exports to Russia, as Russia continues to take steps to reduce its reliance on the United States and become more self-sufficient in protein production."

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