Food market functions well despite coronavirus crisis: Luke

The food market has functioned well in Finland in 2020, regardless of the coronavirus pandemic, according to the agri-food sector outlook of the Natural Resources Institute Finland (Luke).

There have not been any significant changes in the average consumer prices of food products during the year. Foreign trade in agri-food products has increased fairly moderately, said a Luke press release.

Food supply in Finland has not been threatened by the coronavirus pandemic, even though the situation has tested the functioning of the food supply chain.

Milk, meat and cereals are still being produced in Finland almost in line with consumption. Food supply has also remained relatively unchanged as a result of well-functioning international trade relations and procurement chains.

According to Jyrki Niemi, research professor at Luke, food supply might face major problems if the coronavirus crisis persists for more than a year, extending to the next growing season.

“There would be significant uncertainties in the food sector if a large number of farmers and workers in the food chain were seriously affected by coronavirus at the same time, resulting in a break in the food logistics chain, for example,” said Niemi.

“In the logistics system supporting the food chain, main concerns caused by the coronavirus situation are also related to the illness of workers and consequently to potential breaks in the production chain. So far, there have not, however, been any incidents that would significantly restrict the activities of primary production, food companies or trade”, Niemi added.

A key challenge for dairies and meat processing companies during the coronavirus crisis has been their adaptation to the reorganisation of the market, as restaurant demand has decreased and home consumption has increased. In some countries, mainly in individual dairy companies, the processing capacity has not adapted to the changes in demand but, in general, the dairy sector is doing surprisingly well.

“In Finland, milk production and the delivery of milk from farms to dairies have continued normally despite the coronavirus situation. The level of hygiene, which is also high in normal conditions, protects production and processing from these types of risks. Domestic demand for dairy products has remained stable in general, apart from a decrease in the consumption of liquid milk, following the current trend”, said Olli Niskanen, research scientist at Luke.

Export markets have shown growth, particularly in China, which is now nearly side-by-side with Sweden as the most important export country for dairy products, measured by value.