28 September 2022 - Livestock farmers are struggling. On Day 2 of the Feedinfo Summit in Barcelona, panellists from different geographies and species shared their experiences on the particular challenges they are dealing with.
Dominating all other concerns right now is the rising costs of production inputs. Vignesh Soundararajan, Managing Director of Indian poultry company Suguna Foods, observed that maize was up 80% and soya up over 100%. Moreover, he is convinced the dominance of wet market sales channels (which he estimated absorb 95% of his products) is making it more difficult to pass on those price rises to consumers, who do not see a branded product but rather an undifferentiated commodity.
While the entire world is struggling with expensive feed ingredients, Europe is also facing exceptionally high prices for energy, because of Russia’s weaponization of natural gas. Taru Antikainen, Vice President of the European Pig Producers (EPP), pointed out that beyond the eye-watering prices, there was another worry—what if, in spite of reductions in use, there simply isn’t enough power to go around this winter? Modern European livestock production requires electricity to keep the barns’ temperatures in a liveable range. “If there’s not enough electricity, you can’t do animal farming,” she asserted.
Weighing in with a global perspective was Daniela Battaglia, livestock development officer for the Food and Agriculture Organization (FAO), who pointed out that in many low or middle-income countries, feed has long been expensive. She even speculates that it could be a positive thing in the long run for rich countries to be experiencing a struggle that less well-off countries have dealt with for a while, because it could incentivize research and innovation around possible solutions.
For example, a greater understanding of how to use alternative feed materials and deal with any antinutritional factors would help adapt to high corn and soy prices. Indeed, Soundararajan concurs that greater experience with formulating with alternative feed ingredients will play an important role in helping to ease the pressure of the current situation, as will innovations which help increase productivity.
Antikainen, for her part, believes that support in the form of low-interest financing is needed to help producers make investments to keep up with the evolving requirements of both regulators and the market. Removing property taxes on agricultural buildings might also help.
But she also said that part of the solution will have to be consumers paying a higher price for animal proteins. She notes that in Europe, the products are often sold with plenty of value-added processing, making them easy to cook and eat. “If you think about any other industry…the [more] work that went into the product, the customer has to pay more for it.” Why, she wondered, should the same not hold true in meat?
There is an urgency to her calls for action; Antikainen cited a shocking survey of producers in her home country of Finland which showed that 50% planned to quit by 2030. “That’s a huge, huge thing. One of the reasons is the EU legislation and requirements, because the industry has been struggling for years, so there’s no money left, and if they’re not getting any support, there’s no way they can continue their activities.”
That dramatic squeeze will be most obvious among small producers with less than 200 sows, she says; the larger ones have access to capital to make the investments required by evolutions at the EU level. “The EU policy stated that they are supposed to support family farms… but they’re killing all those farms. I don’t understand that. Because they have denied all the support for the poultry and pigs. Where [are they supposed to] get the money?”
The fear, as expressed by the panel’s moderator, Véronique Aguera of GIRA, a consultancy, is that we will ultimately see a dramatic decrease in EU livestock production as it becomes uncompetitive, and the continent will end up importing lots of its protein from other places. For Antikainen, this would be a shame, because the protein produced in Europe is of high quality. “In Finland, people want to buy Finnish meat, because it’s really hygienic, it’s quality, without antibiotics because the health status in Finland is really high, we have no Salmonella in any of our products—every single batch going to the slaughterhouse is checked for 10,000 different types of Salmonella, so if any farm gets it, it would be eradicated.” These are advances that provide value for the consumer, but they have costs, and the farmers cannot bear those costs alone.
Battaglia offered a more hopeful spin on things. While the situation now looks depressing, she recalls how bad things looked in the early 2000’s amid the BSE crisis and foot and mouth disease. “That really shaped the livestock industry…I think the sector at that time took it as an opportunity to grow stronger, more responsible, and especially safer.” In her interpretation, the current crisis could be a catalyst towards an agriculture sector which is a major actor in the sustainability revolution. “That’s something that could be turned into an opportunity.”
