Europe’s maize millers are at the center of an increasingly integrated supply chain, producing high-quality products for a food market that demands ever higher standards in terms of safety, sustainability and traceability.
At the same time, it faces the challenge of securing the right quality of raw material in sufficient quantities.
The industry is represented by the Brussels, Belgium-based trade association Euromaisiers, whose members comprise 90% of the sector in Europe. As well as providing a platform for dialogue with European authorities and all relevant stakeholders in the food/feed chain, it aims to shape the future of the European maize milling industry by encouraging the best agricultural and industrial practices.
Euromaisiers members produce a wide range of natural and healthy maize-based primary foods destined for the manufacturing of various food, drink and feed products, including breakfast cereals, snacks, beer, baby food, petfood and cattle feed.
The total quantity of maize milled by Euromaisiers members in 2019 was 1.76 million tonnes.
The president of Euromaisiers is Claude Gagnol of Limagrain Ingredients, elected in 2018 for a renewable three-years mandate.
“My job is to ensure the supply of grain to our business, so that we can supply our customers,” he told World Grain. “I joined Euromaisiers as president for three years. A European association is important to us, even though our activity, on a global scale, is small in relation to the quantity of maize that is produced on a European scale.”
The EU’s annual production of maize is more than 60 million tonnes, with only around 2 million going for dry milling.
“It is a marginal activity, but it needs a lot of attention on the food aspects because we are primarily focused on human food,” Gagnol said. “Our members are processing mainly flaking grits, semolina and flours. The first market for usage is brewing, for beer. Maize has a role in the production of beer because it is an ingredient that is very competitive, in comparison with barley or wheat. The beer market is large, but it isn’t growing in Europe like it has in the past.”
The second most important sector is snacks, he said. Many are made by direct extrusion, but some, for example tortilla chips, often are produced using the whole grain.
“Often masa, made from maize flour, is used,” he said. “Then, of course, there are breakfast cereals. That’s a big market for maize, but cornflake sales are tending to fall. Cornflakes are a very old product and a very natural product, particularly if no sugar has been added. This sector of the market is shrinking and being replaced by slightly more sophisticated products.”
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Maize flour markets developing
Gagnol noted that around 15% of the association’s product is exported to outside Europe.
“We are seeing markets for maize flour develop because it is gluten-free,” he said. “That makes it a raw material that is interesting from an allergen point of view and gives us new markets to work on. Then, more generally, we are responding more and more to consumers’ demands on environment and toxins. Our job is getting more and more sophisticated from a food safety point of view.
“In Europe we don’t produce genetically modified maize, which means we can satisfy that market, something that is an indispensable condition for many of our customers. Overall, the market is not increasing greatly, but there are new segments. We’re confident about the future of maize, with its characteristics, gluten-free, non-GMO...”
Maize is also competitive on price.
“It is a raw material that remains affordable and can satisfy increasingly demanding requirements,” he said.
That is despite a sharp recent rise in the global price.
“The effect of the price of maize on the final finished product (beer, snacks, etc.) is relatively small,” he said. “It’s similar to the situation with the cost of wheat in the French bread baguette; it’s less than 10%. For the millers, what costs more and more money are all the organization necessary to secure traceability, sanitary guarantees, mycotoxin free, for example, and the technical quality of our maize.
“The problem is that the maize genetics that are being developed on the market today are based around dent corn while we’re looking for vitreous grain (i.e. flint corn). That’s because we’re not using maize in the same way as a starch producer. We’re looking for a technical quality in the raw material that is getting increasingly rare.
“The geneticists are oriented to producing varieties that produce much higher yields for the farmer, which is dent corn. What we need is flint corn, which has a much lower yield because the geneticists have done a lot more work on dent corn than on flint corn.”
That creates a problem with sourcing raw material.
“The problem isn’t the price of the raw material at euronext or the CBOT, it’s the increasing difficulty of finding raw material with the qualities we need,” he said. “Seed breeders are starting to take an interest in developing flint varieties for more specialist markets like ours.”
The best way to encourage production is to create premiums for farmers that are enough to compensate for lower yields in the fields, he said.
“To do that, the maize processors need to organize production jointly with farmers, with stockholders, in a way that provides traceability in an integrated chain,” he said. “As far as raw material is concerned, we are definitely oriented toward an integrated chain system. If you have exclusive dedicated genetics, you can imagine what is called a closed loop, that means you develop genetics for a market, with clearly defined users, under a contract. Not everyone has access to these specialized genetics.”
Maize millers have to be connected to an elevator and the elevator has to be connected to an organization of farmers or a group of farmers to secure the right quantity under contract, he said.
“In all the markets there’s a commodity market and a specialty market,” he said. “We are a specialty market. It is the thing that enables us to maintain the value added in our businesses. Maize is a commodity, but our maize is special. When you are organized in an integrated chain for the food market, all the byproducts you produce are produced by a food grade organization.
“For our byproduct customers, they have an advantage that the raw material is much better protected from a food safety point of view.”
CAP reform and impact of the Green Deal
The European Union is currently going through a process of reforming its Common Agricultural Policy at the same time as bringing in the European Green Deal, an inherent part of which are Farm to Fork and Biodiversity strategies designed to transition the food sector to a greener model.
Gagnol distinguished between measures focused on agriculture and those that are oriented to the food sector.
“Today, when you look at the European Union, our principle preoccupation is with food safety rules,” he said. “Our customers are consumers, human beings, and food safety is the preoccupation of European policy. We are no longer in the environment of the 1960s when it was just necessary to produce enough to feed the people. We’ve still got to feed them, but we have to give them food safety guarantees.
“Food safety rules are increasingly demanding. We see it on allergens. We see it on contaminants. We see it on mycotoxin. Together with the European institutions we must listen to the demands of consumers and be able to respond favorably and in a timely fashion. For example, we have explained to the commission the problems that we have when they cut the minimum level of mycotoxins, because it limits our access to raw material.”
Finding maize with a very low mycotoxin level is not always possible, despite the industry’s best efforts, he said.
“The EU should recognize that and give us time to organize and change agricultural practices and genetics and secure a supply of raw materials with low mycotoxin levels,” Gagnol said. “One thing is that we need to make farmers understand that to reduce the risk of mycotoxins they have to harvest the maize sufficiently early. They shouldn’t leave it in the field until November. That’s another reason why the idea of an integrated chain is important. To make those upstream understand the demands of those downstream and vice versa.”
He said that while the CAP mainly affects farmers, it’s the job of Euromaisers to respond to consumers.
“They have three types of demands: health, environment and sustainability,” Gagnol said. “If the agricultural policy helps us to orient farmers to make their production more respectful of the environment, it will make it easier for us to satisfy the demands of consumers.
“What is finally at stake is that everyone receives fair remuneration. It is important that the market understands the costs of this constraint. Every new demand will mean increased costs for the partners in the integrated chain, whether they’re a farmer, an elevator, a mill or a producer of finished products.
“We have reached a point today, in society in general, where we need to consider the costs of our demands and understand that society needs to be ready to shoulder the burden of those costs. There are no miracles. We have very little margin for maneuver to absorb new costs.”
