By Gerard Le Puil
In recent months, the increase in production costs faced by milk and beef producers has been mentioned several times due to the increase in the prices of cereals and oilseeds that are part of the cattle feed. While the diet of cattle, sheep, and goats is primarily herbivorous, that of swine and poultry is primarily a grain eater. In France, poultry consumption increased by 1.9% in 2021 compared to 2020. But Interprofession specifies in a press release that this “The good news is overshadowed by the combination of difficulties faced by professionals in the sector: a record increase in production costs, a new episode of avian flu and the resumption of imports. In fact, if imports had stopped in 2020 with 40% of imported chickens consumed imported, they resumed in 2021. Last year, 45% of chickens consumed in France came from abroad”. specifies the Interprofession.
According to INSEE, the selling price of broilers rose by 5.4% in France last year. But feed prices, which account for more than 60% of production costs, rose by 15.1% over the same period. And this is just the beginning, as grain speculation is accelerating after Russia’s invasion of Ukraine. Between them, these two countries have sold thirty percent of the cereals exported around the world in recent years, mainly wheat and maize. Ukraine’s exports departed from Odessa, the Black Sea port currently bombed by Russian aircraft. This is encouraging speculation in wheat, corn and oilseeds such as rapeseed, soybeans and sunflower in trading rooms around the world. When the price of a ton of corn rises by 15% in a single week, there is cause for concern for both breeders and consumers.
War confirms the importance of food sovereignty
This speculation on food is favored by the proliferation of international trade, itself based on social, fiscal and environmental dumping, which also increases the carbon footprint of our plate, all else being equal. In this context, a joint press release by FranceAgriMer (agricultural and sea products national establishment) and Terres Univia (vegetable oils and proteins inter-profession) was published on March 3 at the Salon de l’Agriculture. These two structures herald the upcoming creation of a material flow platform intended for animal feed. More than ten interprofessional structures of agricultural production and the agri-food industry say they are concerned about this project. They indicate that this platform “It will be accessible to all and will allow, more broadly, the monitoring of the implementation of the Plan-Proteins and, in particular, of the protein sovereignty of France. Thus, it will contribute to the monitoring and evaluation of agricultural policies by the government”, adds this press release.
We will see with use if this new structure will favor “the protein sovereignty of France”, or whether it will be used to speculate on the information it discloses about the state of markets for various agricultural commodities around the world. However, the following information can be read about Ukraine and Russia in “La France Agricole” of March 4:
“Many agricultural products will be affected by the conflict, especially sunflower oil, of which Ukraine alone supplies half of world sales and Russia 30%. These two countries were expected to export nearly 10 million tonnes for the 2021-2022 campaign. However, global sunflower oil needs are high this year due to colza production in North America, hot and dry weather that has reduced production prospects in South America, slow palm production in Southeast Asia. With the partial interruption of its crushing, Ukraine may not be able to supply the expected volumes.”
Spring plantings stopped in Ukraine
Sunflower sowing being done in spring, as well as corn and certain types of wheat, will be interrupted in Ukraine by the presence of the Russian army. Therefore, Ukraine is likely to be much less present in the international markets for wheat, oil and sunflower meal after the summer 2022 harvest. In conclusion, the same article in “La France Agricole” told us that “As for maize, Ukraine should provide 18% of world sales (33 million tons). She has carried about twenty since 1 er October. It still has 13 million tonnes to export until September, almost half of which to the European Union. It is also difficult to envision a complete alternative: in the event of a prolongation of the conflict, this would make European supplies critical”, we read in this article.
France has a surplus in corn as well as in wheat. But several European countries, including Belgium, Denmark, Spain and the Netherlands, import a lot of animal feed for their pig and poultry farms. Faced with the risk of shortages, the situation of ranchers will be increasingly uncertain, as they are also subject to strong price increases in the energy sector, without the certainty of covering production costs with the sale price of milk and meat. On the consumer side, the poorest will be the most affected by rising food prices.
In our article yesterday, we discussed the risks induced by wheat speculation in poor, highly import-dependent countries such as Egypt. Last night’s guest of the CNews chain, Fabien Roussel, PCF candidate in the presidential elections, insisted on the fact that it was advisable not to block the port of Odessa, in Ukraine. It is in fact from this port that delivery boats leave for many countries, including Egypt; that need to be delivered while the Russian army is at the gates of the Black Sea port city.