This year, the selling prices of agricultural products have increased enough to offset the increase in costs. But economists see that many companies cannot raise prices any further because consumers are no longer willing to pay. “For many companies, the question is whether they can continue to pass on costs.”
Furthermore, the bank’s economists think the cabinet will buy few farms in the coming year. As a result, dairy, meat and egg production will only be minimally affected.
Drop
Sales in the entire agricultural sector will decline by 2% this year. The main reason is a decrease in production in greenhouse horticulture. Many Dutch greenhouse horticulture companies have financial problems due to high energy prices. “Of course they use a lot of gas for heating and electricity for lighting,” says agriculture economist Nadia Menkveld of ABN Amro. “And what you’re seeing is businesses are lighting less to save costs.”
The prospects for floriculture are also not good, according to economists. ‘In some cases, companies even stop altogether because it’s no longer profitable. They can no longer get enough for their produce to compensate for the high energy costs, so we expect there will be 10 to 20 percent fewer Dutch flowers and plants on the floriculture market,” says Menkveld.
Livestock farming in the Netherlands will again face high costs, according to ABN AMRO. ‘So far, many entrepreneurs have been able to compensate for this with higher prices for products such as eggs and poultry meat. Milk prices are also historically high.”
Good year for arable crops
The picture looks rosier in arable farming, i.e. plus 4%. This is partly due to better than expected harvests and favorable prices. “A stable development of volumes is on the horizon for 2023”.