Legend:
yellow highlights my own thoughts, or i need to check something later red when I need еo google, research something and blue highlights when I am not sure if I heard professor correctly, so I wrote as I heard it green is just me researching something i didn’t understand with chatgpt Note that some slides is not included in the ppt that uploaded in the eCampus, I’ve described them in some way
Alumni Tobias shared that he liked (found useful in his work as a private label supply (?) manager) the course because it helped him understand:
the structure of retail markets interdependencies of agricultural and food markets !Think myself how this class can help me in my future endeveours
1. Introduction of lecturers:
1. PhD Johannes Simons (pronounces in russian Зимонс)
not a professor, in germany it is a separate title He specializes in food actors, there is a magazine german one Liebe agents something like that, (food agents, and ? he is a friend or something like that to one of the editors, or management/authors of the magazine), and he mostly thinks in therm sof behaviorial side of food markets
CHatGPT4o: The German magazine *Liebe Agenten* focuses on the food market and the key players within it. It covers a broad range of topics such as food production, sustainability, ethical consumption, and the roles of various actors within the food industry, from small producers to large corporations. The magazine likely highlights trends in local and global food markets, innovative approaches to food systems, and profiles of individuals or companies driving change in the sector. This would align with your interest in transforming food systems and collaborating with organizations to make the food sector more sustainable and innovative. You might find *Liebe Agenten* helpful in exploring industry insights, spotting opportunities for change, and understanding the dynamics of food market actors in Germany. 2. Food safety is more Monika Hartman
3. Value chains more a topic of a Professor Lemke
4. Tatic (pronounces in russian Татич) Quantitative measures and competitiveness
2. Relevance of Global Food Markets
Butter recently experienced very significant price jump, current (average ?) Price is around 2,39 euro for a quarter (250 gr) of butter, and before it was 1,39 euro
price influenced by ?milk prices?, butter is essentially a fat of milk (and the prices increase is explained → (?cause of the precentage of fat in milk generally is 4% and now it is decreased to 3.7%) ChatGPT talks
but do you agree that the only big impacts change the comsumer price of good because of the price elasticity in food markets? In general, **price elasticity of demand** does influence how much consumer prices change in response to shifts in supply or production costs, but the situation can be nuanced, especially in food markets. Here are some key points: 1. **Low Price Elasticity in Basic Food Items**: Many basic food items, like butter, tend to have **inelastic demand**, meaning that even significant price changes don't greatly reduce demand. People consider these items essential, and consumers will buy them even at higher prices. This characteristic means that changes in supply or production costs can lead to noticeable price increases for consumers because demand doesn't drop proportionally【19†source】【21†source】. 2. **Supply-Side Factors**: In food markets, price changes are often driven by supply-side disruptions (e.g., reduced milk production, climate change, input costs). When these changes are substantial, they push prices up considerably because demand remains steady. However, small disruptions or cost increases might not have a large impact on consumer prices unless they're significant enough to affect the overall supply chain【20†source】. 3. **Threshold for Impact**: Price changes that affect consumer prices tend to occur when there are **large, systemic disruptions** (e.g., energy price shocks, extreme weather events) rather than minor variations like a small shift in milk fat content. For butter specifically, the inelasticity of demand means that significant cost increases (like energy, feed, or logistics) pass through to consumer prices. So, **yes**, significant changes in supply or costs are needed to have a notable effect on consumer prices, particularly in food markets where demand is inelastic. Minor factors, like a slight decrease in milk fat, are unlikely to have a substantial impact on price compared to larger market forces like supply chain disruptions or production costs. i am not sure but I wrote something like this in my course notes, that only the very substential price change can affect the consumer price because of the price elasticity and that the reason why butter price jumped as much is because the precentage of fat in milk decreased, like earlier it was 4% and now it's like 3.7% is it like this, is it true? please find information and list sources to proove it or debunkle it The idea that a decrease in milk fat percentage (from 4% to 3.7%) has caused a significant increase in butter prices is not supported by available data. The major reasons for butter price hikes in Europe are more complex and largely related to external economic and environmental factors: 1. **Rising Costs**: Increased costs of production, driven by energy price hikes (especially due to the war in Ukraine), feed costs, and inflation, have significantly impacted the dairy industry. These increases affect the entire supply chain, pushing up consumer prices for butter【18†source】【19†source】. 2. **Supply Shortages**: Several factors have constrained milk production in recent years, including extreme weather events (like droughts and floods), which have reduced the availability of quality grass and feed for cows. These supply constraints have led to reduced milk output, affecting the supply of milk fat, essential for butter production【19†source】【20†source】. 3. **Shifting Dairy Priorities**: There has also been a strategic shift within the dairy industry. Producers have increasingly allocated more milk to more profitable products like cheese, rather than butter, further reducing butter supply and driving prices higher【18†source】【22†source】. While a slight decrease in the average milk fat percentage could theoretically impact butter yields, this small change would not be enough on its own to explain such dramatic price increases. The broader economic pressures, supply disruptions, and strategic market shifts are far more impactful in determining butter prices. Sources:
- DevDiscourse, FoodNavigator, CLAL News, Vespertool. butter prices increase, why? The price of butter in Europe has increased in recent years due to several key factors: ### 1. **Rising Production Costs**:
- **Energy Costs**: The dairy industry is energy-intensive. With the rise in energy prices (especially due to the war in Ukraine and reduced gas supplies), the cost of producing, processing, and transporting dairy products like butter has increased.
- **Feed Costs**: Higher prices for animal feed, often linked to increased grain prices (also affected by the war in Ukraine and global climate conditions), have raised the cost of dairy farming. ### 2. **Supply Chain Disruptions**:
- **Labor Shortages**: The agricultural and processing sectors have faced labor shortages, partly due to the COVID-19 pandemic, which has disrupted supply chains, causing inefficiencies and cost increases.
- **Transportation Costs**: Rising fuel costs and disruptions in logistics have made it more expensive to transport dairy products across Europe. ### 3. **Climate Change**:
- **Droughts and Extreme Weather**: Climate change has negatively impacted pasture and crop yields in various regions, affecting the availability of animal feed and causing volatility in milk production, which in turn affects butter prices. ### 4. **Increased Global Demand**:
- **Growing Export Markets**: European butter is increasingly in demand globally, particularly in countries like China and the Middle East. This has increased competition for European dairy products, driving up prices domestically.
### 5. **Regulatory Factors**:
- **EU Regulations**: Stricter environmental regulations and sustainability measures in Europe have increased operational costs for dairy producers, contributing to price increases.
### 6. **Inflation**:
- Overall inflation in Europe has also contributed to rising prices across the board, including food products like butter. In summary, the rise from €1.39 to €2.39 reflects a mix of higher production costs, global demand, supply chain challenges, and regulatory impacts. The price of butter in Germany has seen significant fluctuations in recent years. Currently, the price for a 250-gram packet of butter in Germany is around **€2.39**, compared to **€1.39** in the summer of 2023. This sharp increase is linked to various factors, including supply shortages, rising production costs (due to energy and feed price hikes), and lower milk fat content in raw milk. The war in Ukraine and the energy crisis further aggravated these trends, driving prices higher【31†source】【35†source】. The price had previously dropped to €1.39, but increased again due to a combination of decreased milk supply and growing demand for other dairy products like cheese, reducing the amount of milk fat available for butter production【35†source】【34†source 3. World market prices
3F crisis of 2008 - food, finances, fuel 20% of wheat is lost from unprocessed wheat to wheat flour, processed product then it looses water when you bake if we need to bake from 1 tonn of unprocessed wheat a small 50 grams breads, how much of those small breads we will get from that amount of unprocessed wheat? around 20000 pieces of that small 50 gram bread if there is a price 400 euros currently per tonn of unprocessed wheat (?in a peak price in 2022) (?) 400 euros/20000 0.02 → 2 euro cents per piece in 2022 Elasticity of prices — change of prices → demand/supply, skyrocket of prices do not affect end customers (consumers) prices a lot, and only the huge changes in the unprocessed products prices affect them Why these 3 so tightly correlated to each others prices → wheat, barley and corn? they are close substitutes in markets for animal food of course the feed procut should have certain relation of carbohydrates, fats, protein etc., maybe vitamins too, or vitamins can be addedd artificially additionally Soy bean is also a animal feed product, but is not correlated with them cause it also contains oil and it depends on the oil prices Correlation quotent (? or quotation)? ?theassure of susbstitutes? description of (?) manke price 4. Interconnectedness of price increase for animal feed with the increase of meat consumption by humans
Coarse grains refer to cereal grains other than wheat and rice or those used primarily for animal feed or brewing. These grains are warm-season cereals valued for their food, feed and fodder uses in various parts of the world. The projections for coarse grains consist of the aggregation of three separate projections: maize; sorghum and millet; and other coarse grains including barley, oats, rye and minor grains. like barley is used for human nutrition too for beer for example, but coarse grains used primarily for animal feed benefits of coarse cerals for human health In the beggining of 60s we experienced the increase of production in coarse grains, wheat, and paddy rice why the production increased? cereals, rice increase of production → the problem is we eat meat more than cereals, and animals need more cereals and oats becaue of increased demand tfor mea and animals do not convert protein effeciently cows 3 to 1 (?gr) in their meat conversion 5. Picture of the food abundance, fruits. Some of us live in paradise
so what we have now in real life is that we have food abundance. Our culture is living in paradise, or close to paradise. We have abundance of fruits and vegetables and it’s very difficult to describe those markets prizza has so many ingridients inside it many different value chains in prizza factory you need to organize a ot lof logistics to bring all the ingridients together, and only cheese types is 60-70 different kind of cheese at Edeka for example 6. The soybean network
Here we can see soy bean streams but there is a huge network behind their productions as well big industry behinf this actually in outputs we have mostly SB oil and SB meal that used to feed animals abattior by products? what does it mean Automative industry loose a lot of ingridients and when 1 ingridient can not be delievered on time, it’s just stalls like something related to microchip in cars is missing (it happened?) the food industry it’s pretty much the same 7. Number of suppliers
3000 direct suppliers, but indirect in tens of thousands retail bridges all this suppliers and value chains together there can be 60000 different products in big discounters Ali (?express) reduce the agony of choice (behaviorual psychology, consumer psychology, choices decrease, more simple) but some indugle in the choice and its abundance ?perhaps you go to the middle of discounters and more money spend in assortments shop? ? different strategy → theory of demand? sometimes people orient on capitalistic strategy like mazimixe your choice of utility characteristic of products 8. Other issues (? on the task of analysing/encompassing the global agriculture and food market)
meat consumption is embeded also deeply in our culture → BBQs producers proud of what they do (showcasing the pigs they grow) ? Cairing dairy (something-something, I didn’t get it) farms also can be different: can produce different stuff, like rice or meat or there can be museums farms, that you see in movies about gardening, farming farms can be dirty looking also 9. What can be considered a mass production? Farming machinery in agriculture
harvestor of carrots red one there are also harvestr machines for wine (grapes) and blueberries So another part and big part of agrculture markets are machines here on this class we will focus (?as well as in AFECO. IRL, Uni bonn?) on agricultural (agribusiness) market itself, but there are inputs and outputs to this market as well Plane spraying pecticides picture etc. what kind of production can be considered a mass production? 1 family can grow in a year with the help of 2 ppl perhaps → 10000 pigs a year, (?3-4k in stables at the same time?) what pigs would like better to be fed by machines or by humans? (pigs feel themselves better when someone feed them? or machines? ?transponders? → shows exactly what they need to eat and amounts they need to eat free range pig farm would require a lot of admin work to organize it ?even though it’s called free range, (?but they still spend some time in stables?) and then they walk in meadows too if a farmer wants to earn around 50k euro per year like for example they can sell 250 pigs per year, then you need to have around 200 euro per pig as a profit to get 50k euro at the end around 125 kilo weights the average pig, so if he (farmer) sells the whole pig the price is rn 200-250 euro per whole pig slot a way? slotaway? slot away? Switzerland would have higher price, cause of existance of more tarifs → requires more expensive feed, maintain higher standards So 100 pigs is not enough, it’s small number actually ?Medium (average? or median?) number of pigs in farm in Germany is around 600 but if we ask the different question like how many of pigs live in the farm that has more than 1000+ pigs that it would be 80% (the majority of pigs live in a bigger farms) «I’ve visited before organic, bio animal farms (?and it had small number of animals)» in 1950 we had like an ?average or median? amount of pigs at farm 7, rn is 1300 on ?average? So it developed in recent years Question that i don’t remeber? China blocked the import from Germany pigs cause of African Swyne fever ?so prices went down for 10%? Also China’s market is very specific it has a big m,arket for pork and for some not highly popular parts like noses, feet, ears etc. → although you can feed those offal as a dog food as well 10. Mass production is less humane?
Slide with happy pig and cow
? Slide with dirty and space deprived animals?
idustrial production doesn’t look like animal welfare organizations picture it, they overexagerate often. (?Animals are not living in such dirty and space deprived places?)
also in the free range farms pigglets can be killed by senior pigs (like the adult pig weight aroung 200 kilos) ?confining the sower? (what is sower?) ?Feed lot is US, all cattle ← corn?
We eat basically muscles of animals ← meat is
Pigs inseminated artifically (?)
Mass production not considering animal welfare (?)
Pigs dirty stable (?)
Big slaughter houses for poultry or pigs chicken for example, actually very humane, clean, and not as cruel
In big slaughter houses there are sluaghtered around 1500 pigs per hour, they do broke legs (?) if they go to the bathroom of the house (?)
Better jobs
# electricity
stunning → precise
killing CO2 metlod (? method)
kettle (cattle?) B (?) is to shoot them in the meadows but it costs a lot (← meaning, basically more humane method to kill, is to shoot them while they in the meadows, but it costs a lot)
slaughter house is in the size of the footabl field (?)
With Milking rode (De Laval?) cow will go and milk herself whenever she wants
let’s assume she goes to milk herself like 3 times per day, computer can measure a lot of indicators and say when cow would be allowed to be milked by these milking rodes, or not box opens → when chip in the cows neck scanned Netherlands
they can go whenever (?)
11. Farm environmental problems
Environmental organiations (?)
Private companies sometimes do not consider consequences for ppl living there. Spraying pesticides for example. They do not take poeple in consideation
Starving people vs. Fed ones
Starving people vs. Abundance
Maybe that the course the economical driving system
Max the utility (?)!
Efficiency consumption/production/trade (?)
That the consequence, we don’t distribute food among people deciding in what they need it, but the money they have
12. Countries make the framework, but companies creates and runs the markets
Country make the framework but company creates _?__ the only several company have all the trading control in the market
13. Course overview
Theory of food market
We want to share fascination of global food markets
content (consent?)
non tariff barriers (what is that?) presentation → topic needs be related to agric food markets (2 students per group graded) 14. Organisation of the course
Folder literature → WTO agreement site (etc.) agricultural outlook 2023-2024 → Math. driven models regressions analyses?! ← somehow important for me, idk, maybe this methid that i want to learn markets are not separated from each other system of models consider the interdependences modeling (Hecklei?) data from the past ←→ future 
Introduction to course
