STRATEGIE DI APPROVVIGIONAMENTO DELLE COMMODITY AGRICOLE E VALORIZZAZIONE DELLE FILIERE AGRICOLE NAZIONALI FERRARI EMILIO Barilla Wheat and Semolina Purchasing Director
AGRICOLTURAL COMMODITIES MARKETS 2014 A NEW PARADIGMA OR JUST VOLATILITY?
Commodities Ending Stocks Increase
(million metric tons, USDA) World Soybean Ending Stocks & Stocks to Usage World Wheat Ending Stocks & Stocks to Usage 120,00 30,00% (million metric tons, USDA) 240,00 29,00% 100,00 25,00% 220,00 27,00% 80,00 60,00 20,00% 200,00 World Corn Ending Stocks & Stocks to Usage (million metric tons) 250,00 15,00% 180,00 21,00% 25,00% 23,00% 20,00% 40,00 200,00 10,00% 160,00 19,00% 21,00% 20,00 5,00% 140,00 18,00% 19,00% 0,00 150,00 12/13 13/14 14/15 15/16 0,00% 120,00 17,00% 17,00% Ending Stocks Stocks to Usage 100,00 100,00 16,00% 12/13 13/14 14/15 15/16 15,00% Ending Stocks 15,00% Stocks to Usage 50,00 14,00% 13,00% 0,00 12/13 13/14 14/15 15/16 Ending Stocks Stocks to Usage 12,00%
EU Wheat Acreage 4.500 4.000 3.500 3.000 OTHERS FRANCE GREECE SPAIN ITALY 2.500 2.000 1.500 1.000 500-1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
DURUM WHEAT AND SPRING WHEAT PRICE COMPARISON
RISKS IN DURUM WHEAT SUPPLY CHAIN Supply Security Quality Security Price Volatility
Wheat Risk Management Tools: Stocks management (C/O Barilla or suppliers) Geographical Diversification Cross Hedging Cultivation Contracts
DURUM WHEAT RISK MANAGEMENT TOOLS NATURE OF RISK TOOLS SUPPLY SECURITY QUALITY SECURITY PRICE VOLATILITY Cultivation Contracts (integrated Supply Chain) To Guarantee minimum quantity (contracted acreage) Specific Varieties in Specific Areas (varieties, agro techniques, warehousing, selected suppliers) Price Smoothing with monthly quotas and different price formulas Geographic Differentiation To Balance negative weather conditions (areas with different weather patterns) To Balance negative weather conditions (weather pattern) Blend different quality/origins Different price rules on different countries Hedging Commodity Derivatives To secure long term contracts To implement specific hedging practices Stocks Management To secure Quantities To secure specific Quality To Fix Price (financial costs)
BARILLA INTEGRATED SYSTEM FROM AGRICULTURE TO INDUSTRY WE COLLABORATE WITH SUPPLIERS TO CREATE VALUE IN DURUM WHEAT SUPPLY CHAIN Address New Varieties Characteristics Manage Quality through Supply Chain Steer Cultivation Practices Introduce innovative Pricing Formulas Improve Sustainability SEMOLINA MILLING BARILLA PASTA PRODUCTION 7 owned mills 80% internal integration Brief SEED BREEDING WHEAT FARMING Research plans 6 patented varieties COLLECTING Cultivation agreements 250 Suppliers in 8 countries Storage agreements Wheats mix for high quality SUPPLIERS BREEDING COMPANIES
Emilia Romagna Cultivation Contract Top Quality 2013 Italy: Production: 80.000 MT Cropping area: 15.000 ha Average Yield: 6 T/ha Top Quality Characteristics: Protein: 13,45 %
DURUM WHEAT SUPPLY CHAIN CREATING VALUE NATURE OF RISK TOOLS SUPPLY SECURITY QUALITY SECURITY PRICE VOLATILITY BARILLA Cultivation Contracts (integrated Supply Chain) Quantity (contracted acreage) and Logistic, allocating contracts close to milling plants. Reduced Import needs Development of Specific Varieties Agro techniques for Quality improvement and Food Safety, Warehousing, Suppliers Selection Price Smoothing with monthly quotas and different price formulas Farmers Guarantee volumes to the farmers Remunerate quality with specific bonuses Stabilize Farmers revenues
Valutazione delle metodologie di coltivazione del Grano Duro in Italia Lombardia, Veneto and Friuli (PLV) Maize Diversified CropPING SystemS analysed Cultivation Maize (3 years) wheat Soybean wheat Millet - Maize Variabili Sistema di di coltivazione: varietà utilizzate nella rotazione Attività agricole di pieno campo Uso di fertilizzanti Situazione climatica della zona Emilia Romagna (RER) Cereals Industrial Horticultural Marche and Toscana Cereals Proteic Alfa alfa Industrial Puglia, Basilicata and Sicilia One crop Fodder Horticultural Check pea Cultivation Maize wheat Millet - Wheat Soybean wheat- Maize Wheat Tomato wheat - Maize Wheat Cultivation wheat (3 years) Millet Proteic pea (2 years) - wheat (2 years) Alfa alfa (3 years) wheat Rapeseed wheat Sunflower wheat Cultivation wheat (4 years) wheat (2 years) Oat and vetch (2 years) Tomato wheat - Tomato wheat Chick pea (2 years) wheat (2 years) Tillage Sowing Fertilization Pesticides Harvesting Yield Confini del sistema
Staring from Italy a Collaboration with other Supply Chains
ASSESSMENT OF IMPACT DURUM WHEAT CROP CROPPING SYSTEM CONSIDERED The project studied many of the most important issues related to the durum wheat supply chain Sunflower 2008 2009 2011 2010 Wheat Tomato Tomato Wheat Wheat Sunflower Wheat Rapeseed Wheat Wheat Rapeseed Wheat Wheat Field bean Wheat Sunflower Beet Maize Wheat Wheat Wheat Sunflower Sunflower Wheat Wheat Pazzarelli Val Sunflower di Chienti
Results Alternative Cropping Systems CARBON FOOTPRINT (t CO 2 /t durum wheat) and PREVIOUS CROP A favorable previous crop contribute in reducing significantly the Green House Gas emission (- 36%) compared to an unfavorable one. Maize Wheat wheat 0,6 Sorghum a 0,58 wheat Rapeseed wheat Tomato 0,55 0,5 Sunflower 0,48 4b wheat Chickpea wheat Wheat Maize wheat 0,45 0,4 0,35 Chickpea 0,37 b 0,41 b 0,3 wheat after: Cereals Industrial crops Leguminous Vegetables
Results - Alternative Cropping Systems PRODUCTION COSTS( /t durum wheat) and PREVIOUS CROP A favorable previous crops contribute in reducing significantly production costs (- 31%) compared to an unfavorable one 180 160 140 120 100 80 60 40 20 0 wheat after: 181 a 155 ab 141 124 Cereals Industrial crops Leguminous Vegetables b b a,ab, = Student-Newman- Keuls Test (p=0.05)
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