Domino effect of wheat on meat

In July an unprecedented heat wave hit Russia and within a few weeks the price of wheat exploded, destabilising all international agricultural markets. Wheat inflation is now having a knock-on effect on the price of meat, and especially chicken, beef, and pork.

According to the FAO, the price of meat has already gone up 10% since the beginning of the year. One of the reasons is that livestock farmers have been hit by the spike in wheat prices as 2/3 of their costs go on animal feed, which is made mainly of cereals. For example, 60% of feed for French pork is cereal, and if the tonne of cereal increases 10 euros the production cost for pork increases 4 centimes.

This phenomenon is a clear illustration of how all agricultural markets are interconnected, and how imbalances in one market destabilise all of them. A global approach therefore needs to be adopted to devising and managing agricultural markets, to supplement the industry-specific management system already in place. To do this it is urgent and necessary to set up an international body bringing together agricultural operators from all over the world.