the consequences of the conflict on food prices

For a year and the start of the war in Ukraine, prices have not stopped rising and it is probably not over, say specialists in the sector. And if the prices of our food depend so much on what happens in Ukraine, it is mainly due to the cost of energy. “The energy exploded and suddenly, with impacts at all levels of the chain”, explains Jérôme Foucault, president of the Association of Processed Food Products Companies (Adepale). This association brings together medium-sized agrifood companies that manufacture, for example, frozen or canned foods.

>> INFOGRAPHICS. Franceinfo shopping basket: the price of our 37 everyday products increased sharply in January, find out the situation in your department

“To make a tomato, you have to irrigate and therefore you need energycontinues Jérôme Foucault. This is valid for all agricultural raw materials, and in the same way, for packaging raw materials. It takes energy to make steel, glass or plastic.”

“We have suffered additional costs of around 20 to 25% on all of our agricultural raw materials or packaging depending on the sector.”

Jérôme Foucault, president of Adepale

at franceinfo

Ukraine is also a very large agricultural producer, mainly of wheat, corn, sunflower. Before the war, the country produced more than 100 million tons of cereals and oilseeds (a family of plants from which oil can be extracted). The country’s production has been halved today. With the direct consequence: the prices of raw materials have soared. “This war has greatly upset the marketsanalyzes Marine Raffray, agro-economist with the Chambers of Agriculture. Agricultural raw materials, particularly vegetable ones, have risen sharply. It may have been an exceptional year for farmers growing grains or oilseeds. There is nevertheless a big downside for the animal sectors which, despite the rise in prices for milk or meat, particularly beef, have also had to do with rising production costs: they have to buy feed to cattle outside.”

French cereal growers who smile, breeders who grimace. But overall, the agricultural world has done quite well. In 2022, farmers produced as much, they sold more. An increase of 17.4%, according to the agricultural accounts, the very official statistics of the Ministry of Agriculture which come out at the end of each year. This therefore means that farmers make a slightly better living from their profession. Good news.

Price increases in 2023?

The bad news, however, is for consumers. According to INSEE, food prices have taken 13% on average over one year and this should not settle this year 2023. Today, everyone is careful about what they buy, notes Jérôme Foucault, the President of Adepale: “The consumer is already feeling this. There are already reductions in consumption of expensive products, and in particular fresh products, whether meat products or fish. There are also reports from consumers on private label or first-price products.

“It is to be feared that there will be increases again from the end of spring, beginning of April, and at the end of the trade negotiations which are currently taking place with large retailers on national brands.

Jérôme Foucault, president of Adepale

at franceinfo

The famous trade negotiations fix the prices for the coming year. Like every year, food manufacturers are trying to sell their products to supermarkets at a higher price, if only to compensate a little for their exploding costs and avoid bankruptcies. These negotiations must end at the end of the month and they promise to be difficult. In the meantime, everyone adapts as they can. “Sometimes there are shutdowns for a while, a few weeks or a few hoursexplains Jérôme Foucault. I have the example of a business manager of a very small business who has planned to work at night with the agreement of his employees. They will work at night rather than during the day because energy is cheaper.” One situation among many others that is likely to last, just like the war in Ukraine.