According to the FAO expert, the drastic increase in feed prices will lead to a sharp decline in livestock. It is expected to start this month and last about 3 to 5 months. As the economist emphasizes, the consequence of the fall in stocks will be “cosmic meat prices”.
Animal feed prices continue to rise† Unfortunately, this is a global phenomenon. As Andriy Yarmak, an economist from the investment division of the Food and Agriculture Organization of the United Nations (FAO), stated in the publication “Not just wheat: how the lack of Ukrainian feed will affect the world meat market”, these increases have already led to a reduction in livestock numbers for less productive producers in the Middle East, North Africa and Asia.
This month begins a sharp decline in stock
According to the economist, the drastic rise in feed prices will lead to a sharp fall in livestock and a sharp rise in meat prices.
There is a sharp increase in feed costs, which leads to a drastic decrease in the number of animals, production becomes unprofitable in a short time and then there is a significant increase in meat prices.
“Livestock is declining and meat prices are not rising fast enough to scare consumers. We are on the brink of what we call the start of a super cycle in the meat marketthat is, there is a sharp increase in feed costs, which leads to a drastic decrease in the number of animals, production becomes unprofitable in a short time, and then there is a significant increase in meat prices “- explained the economist .
“I think the sharp decline in livestock starts at the end of May. It can take 3 to 5 monthsand then by the end of 2022 these countries will face cosmic meat prices,” explains Yarmak.
There will be a wave of local wars in the fall
If both the poor and the middle class are dissatisfied, the conditions for the emergence of problems are ideal.
According to Yarmak, there are no grains and rising bread prices cause dissatisfaction among poor people, while expensive meat is very irritating for middle class and rich people† As the economist adds, “If both the poor and the middle class are dissatisfied, the conditions for the emergence of problems will be ideal.” Therefore, Yarmak predicts that youIn 2022 there will be “a wave of revolutions and local wars in regions that are traditional markets for Ukrainian agricultural products”† As the economist notes, “wars serve no one, and war in the region means a rapid decline in income for everyone, including rich countries like the EU and the United States.”
Ukraine is the largest exporter of protein feed in the whole region
Ukraine exports much more feed than food grain.
Yarmak emphasized that although a lot has been said about Ukrainian wheat or Ukrainian grain lately, it would be more appropriate to start a discussion about Ukrainian fodder† “Ukraine exports much more feed than food grain. Feed is number one in our agricultural exports, including maize, oilseed meal and soybeans, which are the main source of vegetable protein for livestock,” the economist noted.
The impact of the cessation of feed exports is being felt late and gradually.
As noted by the economist, the livestock industry has quite long production cycles, so the impact of stopping feed exports is felt with a delay and gradually. †Most countries are only now beginning to understand this” – added.
In principle, it is impossible to replace Ukraine in this market.
The expert emphasized that Ukraine is the largest exporter of protein feed in the entire region. “Other exporters are very far away: the United States, Argentina, Brazil. And in principle it is impossible to replace Ukraine in this market,” said the economist.
About Ukrainian animal husbandry
“I think for Ukrainian farmers who have livestock, now is the best time to increase milk processing, milk production and especially meat“- noted Yarmak. – “Rising prices in the world will create demand for Ukrainian products. And the raw materials, so feed, are cheap now and will remain so, given the problems with exports. That’s why we have conditions for good margins he concludes.
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