The Rise in Global Grain Prices Concerns the Milk and Meat Production Chains in Italy
Maize (Corn) Seed
Market & Price Trends
Published Nov 22, 2022
The Russia-Ukraine conflict and uncertainties related to the agreement between Russia and Ukraine for the passage of ships though the Black Sea continue to have a heavy impact on global cereal prices. In October, the global increase in grain prices was 11% YoY and 3% MoM. The carry-over effect in the price of livestock products is evident since April, as meat prices in Italy increased by 5.7% and dairy products increased by 15.3%, considering the use of cereals for animal feed.
In Italy, due to the increase in costs, almost one barn out of ten is in such a critical situation that it verges on closure, with risks for the environment, the economy, and employment, but also for the survival of the Made in Italy agri-food heritage. Italian farmers are experiencing extremely high production costs, which include a 60% increase in energy prices, added to the 95% increase in feed prices, 110% increase in diesel prices, and 500% increase in electricity bills necessary to also feed the milking and milk storage systems.
As a result, high bills are forcing companies to close and cull the animals, resulting in an estimated drop in milk production by 15% since April, which impacts the production of mountain pasture cheeses.