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Supply Chain Risk

Act for our food sovereignty during containment – Pledge Times

In France, the Agritel firm continuously observes and analyzes the evolution of the world price of agricultural commodities such as wheat, corn, soybeans and a few others. In a note published at the end of October and devoted to a slight drop in wheat prices, we could read that it was carried out, “in a context of profit taking on long positions, in favor of an improvement in climatic conditions both on the American continent and in Russia ”. To put it more simply, this slight drop in prices was the result of beneficial rains in Russia, Canada and the United States. Because these rains favored good emergence of the autumn sowings in these three countries. Suddenly, as the price of a ton of wheat returned to the port of Rouen for export had fallen from € 170 in August to € 206 during the listing on October 20, speculators who had bought cheap wheat in August and September they preferred to sell in order to pocket profits, which brought the ton of wheat down to 202 € at the port of Rouen on October 27.

This is how the grain market has worked for decades in a globalized economy. Three days after this small drop in the price of wheat in Rouen, INSEE published its monthly note on the evolution of prices of agricultural products in France from the farm in September 2020. Over one month the price of wheat was up 3.5% and 13.3% over one year. But since 2020 yields were 25% lower than in 2019, growers are faring worse this year than last year. The same situation prevails for corn producers with prices up 15.7% year over year but yields revised downwards over the weeks during the October harvest for this late cereal.

Sales volumes and lower prices for wines

Over twelve months, the prices of wines paid to French winegrowers fell by 3.6% on average. But the decrease is 6.3% for wines with a Protected Designation of Origin (PDO). Deprived for a significant part of their sales by the closing of bars and restaurants, these same winegrowers are also deprived of the autumn shows after those of spring, even though they usually market a significant part of their production there. With the coronavirus pandemic, exports of champagne and other sparkling wines fell 33% in volume and 42% in value between the month of March and the month of June inclusive. The same trend, although in lesser proportions, has been observed for still wines since the start of the pandemic.

While the price of potatoes fell 8.4% year-over-year, the price of fresh vegetables has risen on average 3.4% over the same period. Fresh fruit prices increased 11.8% at the farm gate year over year. But for both fruits and vegetables, the yield losses due to drought and the additional costs of the 2020 harvest due to sanitary measures are not likely to improve the income of producers. Especially since many have been forced to throw away merchandise at certain times of the year.

Lower prices and higher costs for animal production

We also know that things are going from bad to worse for breeders. Still according to INSEE, in September 2020, the average prices of animal production at the start of the farm were 3% lower than in September 2019. Over one year, the average price of large cattle has fallen by 3.4%. ; that of calves fell by 2%, that of pigs by 16.4%. Even the price of poultry fell by 0.4% including 0.7% for chickens while that of chicken eggs fell by 13.5%. Only the price of lamb has increased by 11.9% over twelve months, but less than two kilograms are eaten per French person and per year on average. The price of cow’s milk is also down by 1.7% over one year, while production costs have risen significantly since the start of summer and will last until mid-spring 2021 in the best of times. Because the lack of fodder due to the drought has forced many herders to buy straw, hay and compound feed in large quantities.

While we have entered a new phase of confinement, the temptation is great to “pay for the beast” on the side of the supermarket signs. Even if it means importing much more than necessary, these brands manage to bring down prices when they leave the farm, forcing breeders to indirectly finance the promotions in stores offered by Leclerc, Carrefour and others in an attempt to gain market share. against each other.

The FNSEA calls for favoring the French origin and the local

Faced with this risk, the FNSEA published on October 28 “a call to consumers for an act of responsible and responsible purchasing by favoring the French origin and the local area, particularly in the local distribution channels which will again emerge; a call to local communities and public actors who manage public canteens (schools, hospitals, prisons, etc.) to strengthen the supply of French and local products; a call to distributors to enter into contracts, at remunerative prices, as quickly as possible, to offer French consumers products from our regions. It is together, in a spirit of responsibility and food patriotism that we will be able to preserve our production capacities while improving the carbon footprint of our food, but also the many jobs in the sector and French food sovereignty ”.

As the economic situation of the country deteriorates over the months, this call deserves to be heard and well interpreted by looking at the origin of the products in order to privilege the proximity and the origin France when shopping in the stores. as in the markets.

Gerard Le Puill

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