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FEFAC concerned about functioning of markets for meat, milk and eggs in the face of rising raw material costs

Praesidium members called for a rapid market transmission of dramatic costs increases for vegetable proteins and energy crops to the final consumer of animal products, in the face of two successive major soybean crop failures in South and North-America as well as of a record-low wheat harvest in Russia.

FEFAC stresses the need for rapid market transmission of dramatic costs increases for vegetable proteins and energy crops to the final consumer of animal products, in the face of two successive major soybean crop failures in South and North-America as well as of a record-low wheat harvest in Russia.
Compound feed manufacturers play a key role as buffer for absorbing price shocks on raw material markets (nearly 100% price increase since beginning of 2012 for soybean meal) to reduce pressure on livestock farmers. This buffer function however has its limitations and the only way forward for livestock producer to maintain their economic viability is to transmit the recent significant upward cost pressure to downstream market partners and to final consumer. The latest market quotations for pork and milk have provided some positive signals which, however, are not sufficient yet to cover increased costs for raw materials, despite constant efficiency gains linked to our R&D and innovation efforts.
FEFAC, therefore, underlines the common responsibility of EU decision-makers and G-20 partners to keep the markets for agricultural raw materials open. Free market access is a precondition to allow markets to function normally. FEFAC, therefore, welcomes the G-20 Farm Minister declaration calling on governments to avoid any measures which could aggravate the present market access and supply situation for agricultural raw materials.
Currently, however, the EU's asynchronous GM approval policy is preventing market access to CGF/DDGS which is today the only alternative source available for vegetable proteins.
In the longer run, the EU needs to reflect on effective measures to raise the attractiveness of growing more vegetable proteins in the EU. The ecological focus areas proposed in the new CAP could provide an interesting option in that regard.
FEFAC urges the European Commission to activate the available crisis management tools and to take rapid market management measures, including removal of non-tariff trade barriers, in order to prevent the aggravation of market crisis, as currently experienced regarding the supply of vegetable proteins.
The current discussion on the CAP reform should be an opportunity to set up market management tools for situation of global shortage due to crop failures outside of the EU. These tools currently do not exist.
FEFAC also calls for the development and improvement of price risk management tools for livestock farmers & processors, e.g. via futures markets for livestock products which are not functional in the EU.