csaba jansik mtt agrifood research finland · mtt agrifood research finland ciechocinek, december...
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Csaba Jansik MTT Agrifood Research
Finland
Ciechocinek, December 12, 2012
segments of the chain
Segments in the chain interact with each other, usually with the neighbouring levels, via various forms of transactions – but each segment is a separate market
The chain is as strong as its weakest link e.g. economics, quality assurance, hygienics, food safety
From “field to fork” – a successful chain is organised and operating smoothly
Bakery Meat Dairy Beer
Biofuels
Spirits
Rapeoil
Margarin
Milling Feed Starch Malt Ethanol
First-stage processing
Second-stage processing
Feed
The majority of food processing industries use directly or indirectly grains and oilseeds, they are crucial raw materials.
Food
Crushing
0 10 20 30 40 50 60 70 80 90
Poland
Finland
Percentage in the shares of the food industry sales revenues
0123456789
101112131415161718192021222324252627282930
Maize
Mixedgrains
Triticale
Oats
Barley
Rye
Wheat
0
1
2
3
4
5
Oats
Barley
Rye
Wheat
Poland
Barley, maize
Rye, triticale, mixed grains
Deficit: durum wheat, maize
Export: wheat, rye
Wheat Barley, rye
Deficit: rye
Export: oats, wheat, malt barley
Finland
million t
million t
Cereal average yield levels
0,00,51,01,52,02,53,03,54,04,55,05,56,06,57,07,58,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
t/ha
Germany
Denmark
Finland
Poland
Finland and Poland similar levels – lagging behind the neighbours
Reasons for Poland: lower use of agricultural inputs
Reasons for Finland: climate and spring cereal production
Reasons: Climate, soil History of farm structure Socio-economic differences
ŁÓDZKIE
DOLNOŚLĄSKIE
LUBELSKIE
ŚLĄSKIE
MAŁOPOLSKIE
MAZOWIECKIE
ZACHODNIO-POMORSKIE
WIELKOPOLSKIELUBUSKIE
ŚWIĘTOKRZYSKIE
PODLASKIE
PODKARPACKIE
WARMIŃSKO-MAZURSKIE
POMORSKIE
KUJAWSKO-POMORSKIE
OPOLSKIE
0200400600800
100012001400
DOLNOŚLĄSKIE
below 15%
16%-25%
26%-35%
36%-45%
over 46%
tho
usa
nd
t
Share of wheat in grain area
Source: GUS database
Reasons: Climate, soil History of farm structure Socio-economic differences
MAZOWIECKIE
OPOLSKIE
DOLNOŚLĄSKIE
ZACHODNIO-POMORSKIE
WIELKOPOLSKIE
LUBUSKIE
ŚWIĘTOKRZYSKIE
PODLASKIE
PODKARPACKIE
LUBELSKIE
ŚLĄSKIE
MAŁOPOLSKIE
ŁÓDZKIE
WARMIŃSKO-MAZURSKIE
POMORSKIE
KUJAWSKO-POMORSKIE
”Polish rye-belt” –
0
200
400
600
800
MAZOWIECKIE
below 5%
6%-15%
16%-25%
over 26%
tho
usa
nd
t
Share of rye in grain area
Source: GUS database
Similarly to grain production, livestock production is also concentrated into specific regions of the country.
Pig farms
Dairy farms
Reasons: climate, soil distances Pig and poultry production is
concentrated into two areas.
Grain farms are concentrated into South-West Finland and by the coast.
One orange dot. = one grain farm
One red dot . = one pig farm
mixed farms specialised farms Quitting livestock farms
VYR: consortium of grain chain participants
integrated into Central European market Isolated by the sea
actors of the chain trade with other segments in other countries
trade only through trading companies
loose interdependence within the chain segments
role of production contracts falling
strong interdependence within the chain segments
Grain trade mainly through the sea.
Grain imports from Czech R., Hungary and Slovakia.
Grain exports to Germany and elsewhere in the world.
No
rw
ay
13
Wheat import:
14 thousand tons
Wheat export:
142 thousand tons
Espanja
32
41
Iso
-
Brita
nn
ia
21
6
Ma
ro
kk
o
Saksa
Lähde: Viljatietopankki, Csaba Jansik
14
Ru
otsi
10
6
Italia
3
4
48
Norja
61
27
21
35
549
Saksa
Egypti
Bangladesh
Nig
eria
Lähde: Viljatietopankki, Csaba Jansik
16
Portugali
6
Italia
6
Brasilia
Kuuba
25
33
35
Tanska
38
Unkari
20
Kazaksta
n
346
41
139 S
aksa
82
Marokko
Wheat import:
684 thousand tons
Wheat export:
940 thousand tons
No
rw
ay
13
Rye import:
44 thousand tons
Rye export:
0,01 thousand tons
Liettua
5
Saksa
6
4
Lähde: Viljatietopankki, Csaba Jansik
Puola
Viro
2
Ta
nsk
a
15
Ru
otsi
13
Rye import:
5 thousand tons
Rye export:
403 thousand tons
46
6
Espanja
Portugali
Lähde: Viljatietopankki, Csaba Jansik
15
Alankom
aat
4
Suomi
58
Japani
No
rw
ay
13
Oats import:
0 thousand tons
Oats export:
327 thousand tons
117
27
Ruotsi
6
Ete
lä
Afrikka
10
48
22
Lähde: Viljatietopankki, Csaba Jansik
Yhdysvallat
76
Irlanti
6
Norja
12
Oats import:
4 thousand tons
Oats export:
45 thousand tons
7
Lähde: Viljatietopankki, Csaba Jansik Espanja
Tanska
16
15
Regional distribution/suitability for rapeseed production
Regional distribution/suitability for rapeseed production
Reasons: climate, soil, farm structure, farm know-how
Reasons: climate, farm know-how
Biological limit: 1,2 million ha Biological limit: 200 thousand ha
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5t/ha
Germany
Denmark
Finland
Poland
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5t/ha
Germany
Denmark
Poland
Winter rapeseed average yield levels Spring rapeseed average yield levels
Production of winter rapeseed Production of spring rapeseed
Polish yield levels are closer to those in the neighboring countries than in the case of grains
Frost danger for winter rape is very big in Finland – saying among the Finnish farmers
Self sufficiency rate 90-110% Self sufficiency rate 30-60%
Rapid growth in the 2000s, peak in 2009
Increase in the 2000s – peak in 2010
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
1,8
2
2,2
2,4
2,6
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
million t
00,05
0,10,15
0,22
00
02
00
12
00
22
00
32
00
4
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
million t
14,9% 74,2% Rapeseed
export 373
10,9%
Rapeseed import
272
Rapeseed production 2 229 thousand tons
Total available rapeseed: 2 501 thousand tons
Oil import
58
Total crushing: 2083 thousand tons of rapeseed
Feed industry 748 thousand tons
Rapeseed oil production 790 thousand tons
Rapeseed cake production 1256 thousand tons
Rapeseed cake export
557 thousand tons
Biodiesel 478 thousand tons
Food oil 167
Feed oil 33
13
Cak
e im
po
rt
42,7% 24,6% 70,5% 4,9%
Total available oil: 848 thousand tons Total available cake: 1306 thousand tons
57,3%
70,5%
Flowchart of Polish rapeseed supply chain in the 2011/12 crop season
46,2%
53,8% Rapeseed import
126 thousand tons
Rapeseed production 129 thousand tons
Total available rapeseed: 255 thousand tons
Cake import 138
thousand t.
Total crushing: 255 thousand tons of rapeseed
Feed industry 282 thousand tons
Rapeseed cake production
144 thousand tons
Oil production 101 thousand tons
Food oil 40
Feed oil 20
40%
51% 49% 20%
Total available cake: 282 thousand tons
Total available oil: 101 thousand tons
40%
Flowchart of Finnish rapeseed supply chain in 2011
Oil export
41
Rapeseed cake 748 thousand tons
Biodiesel 478 thousand tons
Food oil 167
Feed oil 33
Rapeseed cake 282 thousand tons
Food oil 40
Feed oil 20
“Cake surplus – oil shortage” “Oil surplus – cake shortage”
Major driver of growth: biodiesel Major driver of growth: cake
Vegetable oil consumption is stable Vegetable oil consumption is stable
Protein feed self sufficiency: 27% Protein feed self sufficiency: 40%
Imported sunflower cake
642 thousand tons Imported soya cake
1888 thousand tons
Imported soya cake
180 thousand tons
+ 40 thousand tons of own protein crops: Peas (10), beans (8), lupine (22) + 142 thousand tons other protein feed from own prod.
+ 32 thousand tons of own protein crops: peas (12), beans (20)
0
2
4
6
8
10
12
14
16
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
0
2
4
6
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
billion EUR
billion EUR
In any relative indicator the 2012 export performance is not so far from each other.
Remember the size difference between the two countries.
0 5 10 15 20 25 30 35 40
Poland
Finland
Agrifood exports/food industry worker
thousand EUR/employee
Largely competitive Positive trade balance Spectacular growth in 10 years
Competitive Negative trade balance - expanding Sluggish over the past decade
Reasons:
Excellent location in the heart of Europe – logistic advantages
Peripheral location – logistic disadvantages
Cost advantages: labor, raw material, energy
Expanding huge domestic market (determines company size and growth opportunities)
High costs
Saturated small domestic market (determines company size and growth opportunities)
Who owns the chain?
Who integrates the chain?
Farmers, domestic private investors, banks, pension funds, insurance funds, or foreign capital (professional or financial)?
What is the interest of the owners? Further development? Modernisation? Geographical expansion? Market consolidation? Dividends?
Who takes the initiative to make the chain operating smoother?
Vertical coordination and integration
Organizational issues, information flow, tracebility, quality and hygienic control
Who controls the chain?
In the case of commodities? Buyers? Sellers? Traders? Is there any risk management? Hedging? Insurance?
Which segment has the biggest negotiating power? Which is the strongest to enforce its will on the others?
Market structures – concentration
Distribution of income within the chain – who adds value within the chain?
Foreign trade used as the ace card
Who bears risk within the chain?
How sudden price changes flow through the chain?
Who bears the risk of daily grocery sales?