Focus on Italy

by Chris Lyddon
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Italy is a country with a proud and distinctive food tradition and a healthy food processing sector built on that tradition. Mention Italian food and the world thinks of pasta, and for good reason — Italy is both the biggest producer and the biggest consumer, per person, of pasta globally.

The International Grains Council (IGC) puts Italy’s 2009 grains crop at a total of 17.2 million tonnes, compared with 21.2 million in 2008. Total wheat production was 7 million tonnes, compared with 9 million in 2008, while maize production was 8.5 million tonnes, compared with 10.3 million in 2008.

The IGC also lists Italy’s sorghum production at 200,000 tonnes in 2009, compared with 100,000 in 2008. The Council includes durum wheat in its overall wheat figure, but it also commented on the durum wheat crop for 2010, compared with 2009. "Although conditions have not been entirely beneficial in Italy, a small increase in output is still forecast, to 4.1 million tonnes, up from 3.9 million in 2009."

Maize is overwhelmingly used for animal feed (82% to 85%, according to the national plan for cereals), while 4% to 5% is used for human consumption with the rest going for various industrial uses, including a very small amount (2% to 3%) used for biofuel production.

According to the Italian Ministry of Agriculture, grain is produced on 622,000 farms, covering 3.9 million hectares, spread through "plains, hills and mountains."

According to the national plan, there are 516 mills, of which 178 are specialized in processing durum for pasta. There are also 658 animal feed mills and two malt plants. The plan gives turnover figures for 2007 showing total turnover for the primary grains processing sector of €7.375 billion. The sector provides employment for 14,000 people.

In secondary processing there are 129 pasta plants, with sales of more than €3 billion a year. There are 185 industrial bakers, as well as 24,500 artisanal bakers with a turnover of €7 billion. The turnover of the confectionary industry is €10.1 billion, of which €4 billion can be attributed to the cereal content.

The bumper 2008 grains crop helped to lower prices for cereals in Italy after the sharp rises which affected world markets in 2007, according to the milling industry association ITALMOPA.

It puts the industry’s production in 2008 at 10.25 million tonnes, divided between 3.86 million tonnes of flour, 3.4 million tonnes of meal and 2.99 million tonnes of bran.

ITALMOPA reckons that, because of immigration, Italy has been shielded to some extent from the reductions in demand in Germany, France, Britain and the United States that accompanied the recent recession. The food industry, at the same time, is gearing up to provide food to suit the varying tastes of an immigrant population which it puts at 7% of a total of just over 60 million residents.

At last year’s ITALMOPA annual assembly, outgoing President Ivano Vacondio called for official action to combat volatility.

The Italian market is watched closely by British exporters, although the lion’s share of imports come from Italy’s neighbors. According to British Cereal Exports Manager Sarah Mann, of the 3.533 million tonnes that Italy is likely to import from the other E.U. countries during 2010-11, 1.5 million tonnes will come from France, 600,000 tonnes from Germany, 369,000 tonnes from Austria and 442,000 tonnes from Hungary. Just 32,000 tonnes are likely to come from the U.K.

The U.S. Department of Agriculture (USDA) attaché has also noted the need for imports. "Due to its large food processing sector’s need for inputs, Italy has become a net agricultural importing country. In 2008 it imported from the U.S. $103 million in wheat for pasta and confectionary," a recent news report from the USDA’s Rome office noted.

The industry has a few large players. "The top five bread wheat millers account for 20% of flour production" Sarah Mann said.

Italy’s pasta production was put at €6.1 billion in 2008, making it the highest in the world, according to the USDA, while per capita consumption of 26 kilograms of pasta makes Italians the leading pasta consumers. "In order to maintain its production, Italy imported more than 406,000 tonnes of durum wheat from the United States in 2008," the attaché noted in a news story on the sector. "Italy’s number one export market is Germany, followed by France, the United States and Britain."

There are some very big players in the Italian food industry. On May 11, Barilla Group announced its annual results for 2009 with sales of €4.171 billion and EBITDA (earnings before interest, taxes, depreciation, and amortization) of €527 million. With sales of €3.2 billion, its Barilla G e R Fratelli (€3.2 billion sales) remained the world leader in the pasta market and Italian market leader in bakery products.

Grandi Molini Italiani (GMI) describes itself as the foremost Italian milling group, with turnover of €263 million in 2009. It processes 985,000 tonnes of wheat a year at five plants in Italy.

BIOFUELS

Like other European countries, Italy has a policy of increasing biofuel production. However, the E.U.’s progress report, issued in April 2009, put the percentage reached by the end of 2007 at just 0.5%. According to the European Biodiesel Board, Italy produced 595,000 tonnes of biodiesel in 2008, and it had plants with a capacity of 1.91 million tonnes in 2009.

In a more recent report, German analysts F.O. Licht put capacity at 2.5 million tonnes, "definitely too large for an 800,000-tonne market."

The European Bioethanol Industry Association, eBio, puts Italy’s ethanol production in 2008 at 60 million tonnes. Much of its ethanol production uses raw alcohol as a feedstock. Only Alcoplus, with a capacity of 42 million tonnes, uses cereals.

VOCAL OPPOSITION TO GMOs


Italian politicians have been vocal in their opposition to genetically modified crops, leading the campaign in European institutions. The USDA attaché has expressed a hope that the hard line may change with the appointment of a new agriculture minister, Giancarlo Galan who has replaced Luca Zaia. "Unlike Zaia, Galan has shown a more realistic approach on several issues, including biotech," the attaché said in a recent report on the change. "Federico Vecchioni, president of Confagricoltura (the pro-biotech farmers’ organization) supported Galan’s candidacy, while Coldiretti (the strongly anti-biotech farmer group) opposed it. Although it is too early to predict if Galan’s appointment will lead to a substantial change in the ministry’s policy on biotech or other issues of U.S. interest, one early sign could be Galan’s willingness to sign the decree approving biotech field trials, which Zaia refused to sign for nearly two years."

Minister Zaia reacted angrily to the European Commission’s recent decision to allow the production of a GM potato, the first genetically modified crop licensed for 12 years. He suggested holding a national referendum. "He reiterated that Italy’s strict enforcement of a ban on GM foods is a ‘question of national sovereignty’ and announced plans to ally with other E.U. members to demand that the decision be reversed," the attaché said.

"Zaia recently vowed to prevent the potato from crossing Italy’s border in order to protect Italy’s agriculture, culinary heritage and consumers," the report said. "Many observers find it difficult to understand what the Ministry thinks it is protecting Italian consumers from. A significant percentage of Italians would buy GMO foods if they were available, and most do so without realizing it."

It also noted that Italy annually imports more than 4 million tonnes of GM soybeans and soybean meal "as basic ingredients for its livestock, dairy and poultry sectors whose products are processed into Parma ham, Parmigiano-Reggiano, and other renowned Italian food products."

Italy is also the E.U.’s only major producer of soybeans, with a crop of 470,000 tonnes in 2008, according to the European oilseeds industry body FEDIOL. The organization put Italian rapeseed production at 25,000 tonnes that year, while sunflower seed production was 270,000 tonnes.

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