Italian milling industry

“Italy is one of the largest agricultural producers and food processors in the European Union. Italy produces over 50 percent of the EU’s rice and 45 percent of its soybeans. For other commodities, it is typically the EU’s fourth-largest corn producer and the fifth- largest wheat producer, including a significant amount of durum wheat for pasta. Italy is proud of an ancient tradition of excellence in the milling sector. According to Italmopa, there are 358 milling plants with a capacity of over 10 tonnes a day were in Italy.Italy-2-Pisa-D43918220

Italy is a country located in Southern Europe comprising the boot-shaped Italian peninsula and a number of islands including Sicily and Sardinia. Italy has a strategic location dominating central Mediterranean as well as proximity to Western Europe across the Adriatic Sea. It has a diversified industrial economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south. Italy is a member of the European Union (EU).

Italy has a population of approximately 61 million. However the distribution of the population is widely uneven. The most densely populated areas are the Po Valley (that accounts for almost half of the national population) and two metropolitan areas of Rome and Naples.

The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises (SMEs), many of them family-owned. SMEs dominate the economy, comprising 99% of Italian businesses and producing 68% of Italy’s GDP. Italy is the third-largest economy in the euro zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets. Unemployment remains above EU averages. Italy is a mature and sophisticated market. Italy’s regulatory environment is complex and at times lacks the transparency, clarity, efficiency and certainty found in other developed economies.

Agriculture is one of Italy’s key economic sectors, accounting for around 2.3% of GDP. Italy’s agriculture is typical of the northern and southern division found within the European Union.  The northern part of Italy produces primarily grains, soybeans, meat, and dairy products, while the south specializes in fruits, vegetables, olive oil, wine, and durum wheat. Approximately 4% of the population is employed in farming.  Most farms are small, with the average size being only seven hectares.  Italy is one of the largest agricultural producers and food processors in the European Union (EU) but it is a net agricultural importer. Italian industries, including the food-processing sector, rely heavily on imports of raw materials.

EU’S BIGGEST RICE AND SOYBEAN PRODUCER

Italy is a distinctive and unusual within the European Union (EU) because it has a Mediterranean climate which enables production of a variety of crops not possible further north on the continent. According to The United States Department of Agriculture, Italy produces over 50 percent of the EU’s rice and 45 percent of its soybeans. For other commodities, it is typically the EU’s fourth-largest corn producer and the fifth- largest wheat producer, including a significant amount of durum wheat for pasta.

WHEAT PRODUCTION

There are 300,000 wheat farmers in the country. Italy’s wheat production for 2017/18 is estimated at 7.2 million tons, down 1.1 million from previous year’s                crop. Most of the wheat in northern Italy is common wheat, but durum wheat is also grown in the region and its share of total wheat production is increasing. Durum subsidies are no longer coupled with production in the EU. The consequence has been a slow decline in durum; over the past ten years, EU durum production dropped about 25 percent. While domestic Italian pasta (made from hard or durum wheat) consumption is down, exports have increased. According to Statista, the production of soft wheat has slightly decreased, passing from roughly three million tons in 2016 to 2.8 million tons in 2017. The production of durum wheat, instead, decreased from approximately five million tons in 2016 to 4.5 million tons in 2017.

DOMESTIC WHEAT PRODUCTION CAN’T SUPPLY THE DEMAND

Italy grows just 60 per cent of the durum it needs to meet the demand. Imports from around the world fill the gap. Canada is one of Italy’s biggest suppliers of durum wheat. Italy is the single biggest buyer of Canadian durum wheat with 27% of total Canadian durum exports. However the world’s largest pasta maker has cutback Canadian imports of durum wheat because of ongoing consumer concerns about the use of a popular. Barilla’s purchasing director Emilio Ferrari told the reason is that some Italian consumers are fearful Canadian wheat has been “poisoned” because it tested positive for traces of the popular and widely-used herbicide glyphosate.

Despite a slight decrease in organic wheat area globally last year, Italy seems to be bucking the trend, showing 48% growth in the area of organic wheat between 2015 and 2016 (growing from 122,000 to 179,000 hectares). The use of ancient wheat varieties has also grown 250-fold in Italy during the last 20 years, with ancient grains now being used in pasta, bread and even pizza. Although the market of pasta, in general, recorded a slight decrease in Italy, the demand of pasta made with ancient variety of wheat is growing more and more.

Italy is by far the largest rice producer in the EU28. Rice area and production remain largely unchanged year-to-year. Rice cultivation is mostly located in the north where water is relatively abundant and the rice crop can be raised in flooded fields. Italy’s 2017/18 paddy rice production is forecast to fall over 5 percent to 1.46 MMT, a combination of a 2 percent year-on-year decline in planted area due to reduced profitability in the sector and reduced yields due to the summer drought in 2017.

LEADING SOYBEAN PRODUCER IN THE EU

Corn production in Italy for 2017/18 was 6 million tons, 13 percent below the 5-year average. Corn area in Italy has been decreasing, due primarily to relatively low prices and high cost of production. Farmers are shifting instead to soybeans. The EU is a protein-deficit region, so soybeans are in high demand. Italy is the leading soybean producer in the EU, followed by France and Romania. In 2018/19, Italy’s soybean production is expected to increase slightly compared to last year’s 1.140 million tons production in spite of a decrease in area because yields should be better. The increase in Italy’s soybean production is driven by a ten percent area increase whereas soy replaced the less profitable corn in many areas.

THE NUMBER OF THE MILLS DECREASES

Italy is proud of an ancient tradition of excellence in the milling sector. The flours used in Italy are produced almost exclusively in Italy, from the Italian milling industry. Imports of flour represent less than 0.1% of the national production of soft wheat flour. According to Italmopa, the Italian milling industry association, the evolution of the structure of the wheat milling industry in Italy shows a progressive rationalization of the sector with a constant decrease in the presence of active plants .The number of active wheat mills was 821 in 1990, 356 in 2000, 259 in 2010. In 2014, wheat milling plants with a capacity of over 10 tonnes a day were 233 while the total daily grinding capacity at national level results in 28.144 tons.

 The largest number of mills is located in northern Italy with 131 production units, followed by central Italy with 68 mills and the southern one with 34 mills. There are 41 milling plants in Piedmont,  37 in Emilia Romagna, 26 in  Veneto  and 20 in Lombardy and Marche.

 THIRD LARGEST PRODUCER OF WHEAT FLOUR IN THE EU

Italy, with over 4 million tons of soft wheat flour produced annually, is the third producer in the European Union, after Germany and France. The average annual production per mill in Italy is around 16,500 tonnes per year, a level well below the average annual production of mills in the United Kingdom (around 73,250 tonnes), Germany (around 22,250 tonnes) and Spain (around 20,000 tonnes).

Thanks to the extensive use of automation, the new century’s Italian milling industry is a technologically advanced sector. A sector that holds the acknowledged leadership in the European Union, by processing over 11 million tonnes of soft and durum wheat each year to produce 4,1 million tonnes of soft wheat flours and 3,8 million tonnes of durum wheat semolina of well-established quality and absolute safety in terms of hygiene and health. Exports of Italian wheat flour rose to 150,000 tons, a 13% increasefrom the previous year, according to Italmopa. Italy generates 1.8 billion euros from the sale of wheat flour.

WORLD’S TOP PASTA PRODUCER AND EXPORTER

Pasta is a key product in both the Italian tradition and consumption habits. According to a recent report, there are about 200 different pasta shapes on the Italian market. Italy is the top pasta producer and exporter in the world, sells roughly 1.8 million tonnes every year to overseas markets. According to statistics from AIDEPI , the association of the Italian pasta industry, for the €2.3 billion worth of exports from Italian pasta makers last year, more than 72% of end markets were in Europe.

“The Italian milling sector is certainly facing a number of challenges, first and foremost concerning proper and consistent supplying of high-quality raw materials. It should be noted that national production covers 55% of the needs of the durum wheat milling sector and 40% of the soft wheat milling sector.” told Italmopa President Cosimo De Sortis to Miller Magazine.

We also suggest you to read our previous article titled "Milling Industry in The United Kingdom".

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