Wageningen, The Netherlands
December 27, 2012
ByLEI Wageningen UR
For many farmers and horticulturalists, income in 2012 has been significantly better than in 2011. This is primarily a result of the rise in product prices in most agrarian sectors. The average total income in agriculture and horticulture is estimated at 78,000 euros per holding, an increase of 16,000 euros compared to last year. Every year there are large differences in income across agriculture and horticulture, both within and between different types of holding. This is revealed in the annual figures of LEI Wageningen UR, published today in the report ‘Actuele ontwikkeling van resultaten en inkomens in de land- en tuinbouw in 2012’ (Recent developments in results and incomes in the agricultural and horticultural sectors, 2012).
Average incomes for egg farms, agrarian farms, greenhouse horticulture holdings and farms with breeding sows have increased. Among bulb growers, dairy farms, broiler farms and farms with fattening pigs, average incomes have fallen. For the agrarian sector as a whole, 2012 was a good year in financial-economic terms. The increase in production value (4%) was greater than the increase in production costs (2.5%).
Varied income picture in livestock farming
The rise in prices of animal feed since June due to the sharp increase in worldwide grain prices has held back the performance of all livestock farms. The increase in feed prices follows a previous substantial rise in feed costs experienced by the livestock sector in 2011. Dairy farmers have seen their incomes fall this year, following two years of rising incomes. Besides higher feed costs, the deterioration in income is attributable to lower milk prices. Incomes for veal farms with contract agreements have fallen this year due to declining revenues as a result of overcapacity. Dairy goat farmers achieved higher incomes thanks to a further rise in milk prices.
The income of breeding pig farms has risen strongly due to a rise in the price of piglets. Partly as a result, farms for fattening pigs actually saw their operating incomes fall slightly. Closed pig farms experienced a clear improvement in income, enabling further cost savings. Egg farms have had an excellent year, following a highly disappointing 2011. Egg prices are significantly higher than in 2010 and 2011, amply compensating for increased feed prices. For broiler farms, incomes fell slightly over the year, due to the fact that the increased prices of broilers have not been enough to compensate for the rise in feed prices.
A good year for arable farming
Incomes for arable farms have been significantly higher in 2012 than in 2011 and are around the record level of 2010. This is a result of a sharp rise in prices of consumption potatoes and onions and a slightly less pronounced rise in prices of grain and seed potatoes. Part of the price rise has yet to be realised, because sales and pricing agreements run until mid-2013. Farms with a high proportion of starch potatoes achieved a record profitability of 111% in 2011. Thanks to the good prices for grains, beetroot and starch potatoes, the prospects for 2012 are even better. As a result, incomes at starch potato farms will remain high.
Horticulture: high incomes in greenhouse horticulture and a varied picture in open-air horticulture
Incomes in all three sectors of greenhouse horticulture are rising due to increased product prices. For greenhouse horticulture holdings, this recovery follows a very disappointing 2011, when the sector was hit by the EHEC crisis. Prices for tomatoes and cucumbers have risen strongly after the very low market prices of last year. The level of income in greenhouse vegetables is positive again, but still too low to achieve savings. The incomes of cut flower growers have risen to a good level thanks to better prices as a result of a more limited supply and increased demand. Pot plants and bedding plants have been the most profitable glasshouse horticulture sector in recent years and growers saw their incomes rise slightly again in 2012.
In outdoor horticulture, vegetable growers and fruit growers achieved higher incomes due to increased product prices. Revenues for bulb growers are falling due to lower sale prices. In the tree sector, incomes this year have been virtually unchanged, with moderate sales and rising costs.
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