TÜRKİYEMBİR Chairman Ülkü Karakuş stated that the top priority of the Turkish economy is fighting inflation and that the feed sector has ‘more than’ fulfilled its responsibilities in this regard. Noting that there is no shortage in grain supply or in the installed capacity of the feed sector, Karakuş promised, “There won’t be significant price increases in feed in the coming period.”
Participating in the October 15 episode of the Smart Agriculture program presented by agricultural journalist İrfan Donat, Chairman of the Turkish Feed Manufacturers Association (TÜRKİYEMBİR), M. Ülkü Karakuş, shared significant insights on key topics, including feed prices, tariff reductions on corn, the Food Committee, and rural-to-urban migration issues. Karakuş emphasized that fighting inflation is the most pressing issue on Turkey’s economic agenda today, and explained that the price hikes implemented by the feed sector over a nine-month period from January have ranged between 10-16%. Reminding viewers that raw material price fluctuations have left the market “dizzy” due to both the COVID-19 pandemic and the Ukraine-Russia war over the past four years, TÜRKİYEMBİR Chairman Karakuş added that prices have been stabilized through public-private cooperation. Noting that this year’s price hikes in feed have remained well below inflation rates, he also highlighted that price increases for animal products directly impacted by the feed sector—such as red meat, poultry, eggs, milk, and fish—have all been implemented ‘significantly below the inflation target.’ He indicated that this trend also applies to plant-based products. Pointing out that the feed sector is sufficient in terms of installed capacity and is ‘at the service’ of animal production producers, Karakuş reassured, “There is no issue with grain supply. There won’t be significant price increases in feed in the coming period.”
WE ARE GOING TO EXPERIENCE A FREE MARKET SYSTEM IN CORN
Karakuş, who also serves as Chairman of the Turkish Agricultural Assembly within the Union of Chambers and Commodity Exchanges of Turkey (TOBB), noted that contrary to last year’s expectations of drought, abundant rains led to record production. Sharing statistics on grain production, the seasoned businessman revealed that wheat reached a historic high of 22 million tons, with 9 million tons each of barley and corn produced. He stated that the total raw material production, including rye, oats, and triticale, reached 41 million tons. As a result, he recalled that in 2023, Turkey experienced a period of surplus supply, which was unusual for the country, allowing for corn and durum wheat exports.
For 2024, however, Karakuş indicated that rainfall has slightly decreased, leading to a 10-15% reduction in grain yield, with an even more ‘dramatic’ drop in oilseed crops. He emphasized that due to this, certain raw material prices have increased ‘well beyond market expectations,’ which has impacted feed prices. Addressing the changes in import duties on corn and the newly implemented quota of 1 million tons, Karakuş pointed out a distinct difference in this year’s decision, explaining: “Typically, such intervention during harvest time would be misinterpreted, but under the current circumstances, this adjustment was necessary. Traditionally, tariff quotas were managed by the state through TMO (Turkish Grain Board). This time, however, for the first time, it has been opened to the private sector, allowing us to fully experience a free market system in terms of market balance. In the coming months, we will see a market structure entirely equivalent to global standards. Therefore, this customs duty was implemented at the right time and in the right way. In fact, within just 1-2 days, we observed its impact. By the start of the week, we even applied a slight reduction in feed prices. Naturally, any decrease in raw material prices is also reflected as a reduction in feed prices.”
TÜRKİYEMBİR Chairman M. Ülkü Karakuş
Ülkü Karakuş made some criticisms regarding the Food Committee during the program he attended. “The Agricultural Product Price Monitoring Committee, established in 2016, was later renamed the Food Committee. They conduct their work under the coordination of four ministries. The aim of setting this up was to involve the Ministry of Finance, which controls financial resources, so that the Minister of Agriculture can easily access any needed resources,” he explained. Karakuş added, “However, if I may express my personal opinion, I believe that after eight years, this plan hasn’t been very effective.” Karakuş highlighted that the unchanging fundamentals of economics are always at play, with prices always determined by the balance of supply and demand, adding that fluctuations can occur not only on the supply side but sometimes on the demand side as well. He cited the recent decline in purchasing power as an example. He explained that despite shrinking demand, there has been an increase in supply, which has contributed to a drop in prices. Karakuş noted that he expects these conditions to remain unchanged until the end of 2024 and emphasized that a downward trend in prices is being observed under these circumstances. On the other hand, he stated, “We do not expect a decrease in interest rates in 2024.”
Recalling that the parity for meat and milk, previously at 1.3 in past years, was later raised to 1.5, Karakuş remarked, “However, I believe these parities don’t work in isolation. Our primary issue within the Food Committee, as it’s now known, is the lack of consensus on starting prices. The same holds true in councils: there is no agreement on which parameters should be considered when calculating raw material costs. Reaching a consensus on this is essential.” He highlighted that producers working in different regions with varied motivations should not be lumped together, as their costs are likely to differ. For example, while some producers operate just to cover basic sustenance, others explore export opportunities to address the food needs of the Middle East. Given these differences, Karakuş noted that the same policies won’t be effective for every producer. “We’re in a market where neither the producer nor the consumer is satisfied,” he said. Karakuş also addressed the discrepancy between prices in the field and those on store shelves, urging that logistical and other costs not be overlooked. He advised that “the Food Committee must ensure that an expert provides the correct decision and calculation at the right time. Otherwise, we end up arguing among ourselves, losing sight of the real issues facing genuine producers.”
GAINING EXPORT MARKETS HASN’T BEEN EASY
Karakuş highlighted how the closure of export markets, driven by concerns that domestic prices might rise due to supply anxieties, ultimately harmed the industry. He emphasized that agriculture is a sector marked by high levels of risk and uncertainty, with one of the highest price elasticities. “We didn’t easily gain our export markets, especially in poultry and eggs. Following these, dairy, meat, and meat products also emerged as strong sectors. Yet, the sudden ban on exports caused significant challenges for producers. Supply disruptions worked against their interests. As a result, both producers and consumers are dissatisfied,” he stated.
Touching on the Ministry of Agriculture and Forestry’s plan for structured production, as mentioned by Minister İbrahim Yumaklı, Karakuş commented, “We’ve long supported the idea of planned production. I place great importance on planting areas centered around water resources. This water-focused approach instills confidence in all of us, and it’s something we should collectively support.”
EARTHQUAKE HOUSING PROJECTS SHOULD ENCOURAGE REVERSE MIGRATION
Chairman Karakuş noted that Turkey’s population has reached 95 million, including 5-10 million immigrants, which contributes to an increase in demand, leading to a market expansion of approximately 10-15%. He pointed out that one-third of the 85 million population is concentrated in three major cities: Istanbul, Ankara, and Izmir. “Germany, for example, has a population of 90 million, with Berlin being the most populous city at 3.5 million, followed by another city with 1.5 million. In Turkey, migration from rural areas to urban centers continues to support agricultural production. We need to encourage rural living; without this encouragement, reverse migration from cities to rural areas is not feasible,” he stated.
Karakuş emphasized that the collective housing projects initiated to heal the wounds of the earthquake-affected region should also focus on promoting rural life. He mentioned that they have communicated with public institutions to ensure that plans for the new housing projects include incentives for reverse migration. “We have made recommendations for the one million housing project in the earthquake zone, suggesting the construction of libraries and social spaces for youth to encourage socialization,” he added. He also highlighted that current support models prioritize not only youth but also female producers, stating, “I believe that the incentives for women should be further improved. One cannot imagine agricultural activities in rural areas without the involvement of women.”
MEAT IMPORT PROCESS SHOULD BE COMPLETED WITHIN 2 YEARS
President Karakuş stated that the feed sector is fundamentally opposed to meat imports but acknowledged that current necessities necessitate their continuation. He called for a reduction in the duration of these imports, suggesting that while the Ministry estimates a three-year period for this practice, it could be completed within two years. Karakuş emphasized that instead of meat imports, there is a need to increase the supply of breeding and fattening animal stock.