News income estimate
Major shifts in agricultural incomes
Incomes in agriculture and horticulture deviate sharply this year from those in the previous year. Major shifts are visible in almost all sectors. At around €100.000, the average income per worker is about 22% higher than last year. It is also more than €34.000 higher than the average over the period 2017-2021. However, it does not give a good picture of the distribution of incomes. For 20% of the companies, an income per worker is estimated at less than € 2.000. An income of more than € 155.000 is estimated for an equally large group.
Dairy farmers, arable farmers, laying hen farmers and most greenhouse growers saw a considerable increase in income. Most other groups, on the other hand, declined. This is evident from the annual income estimate of Wageningen Economic Research.
Special factors
Special factors also play a major role, such as energy costs. Agricultural business economist Harold van der Meulen: "In 2022, we will see strong cost increases for energy, animal feed and fertilizer in all agricultural and horticultural sectors. In a number of sectors, these cost increases will be more than compensated by higher selling prices for products supplied, such as in the dairy sector, arable farming and greenhouse vegetable cultivation. There are also agricultural sectors, such as pig farming, where the selling prices of piglets have risen insufficiently to compensate for the cost increases. In addition, in the other horticultural sectors, the selling prices of flowers, plants and fruit have even fallen, resulting in sharp falls in income ."
Wageningen Economic Research calculates the agricultural income per unpaid annual work unit (aje). These are the agricultural entrepreneurs and their family members. Usually no official salary is charged for them. WER uses the aje formula to compare the incomes of different farm types.
Huge shifts
The costs paid and depreciation per farm are estimated to be 2022% higher on average in 23. This is mainly due to strong price increases for energy, fertilizer and animal feed. This increase in the price of purchased goods is caused by the war in Ukraine, which has led to more expensive grain imports for animal feed. Gas prices have risen due to restrictions on gas imports from Russia and uncertainty in the energy market.
Revenue per agricultural and horticultural company also increased by an average of 23%, mainly due to better selling prices and an increase in company size. These are unprecedented shifts in agriculture and horticulture. Also in 2021 there was already a sharp increase in revenue (+10%) and to a lesser extent in costs (+3%). As a result, the average revenue per company has increased from €630.000 to more than €850.000 in two years.
Income on dairy farms to record
Perhaps the most striking development was the average income of dairy farmers. This is estimated at €2022 for 115.000. It is certainly not the highest of all sectors, but it is €70.000 more than in 2021 and also €70.000 higher than the average over the period 2017-2021. The smaller supply of milk worldwide, amid a strong increase in demand for dairy, pushed up prices, also in the Netherlands. The average milk price received has risen by approximately 47%.
Poor pig farmers' incomes
2022 was a difficult year for pig farming due to the sharp increase in costs, which were not fully offset by higher revenues. The income of an average of €21.000 per aje is about €2.000 lower than in 2021. 2020 was also a bad year. Incomes of €49.000 negative and €14.000 negative per aje are estimated for the sow and closed pig farms.
For laying hen farmers, the income is estimated to be €44.000 higher at €112.000 per aje. This is mainly due to the higher yields, which rose more than the costs of feed and energy. The average egg price has risen by 33%, but with large differences between the farming systems and between market and contract prices. Broiler farmers, on the other hand, are declining. Their income is estimated to be €51.000 lower at €99.000 per worker, because the costs of feed and energy in particular are rising faster than the revenues. The yield prices for broilers will be considerably higher in 2022, but this will not compensate for the increased costs.
Dairy goat farmers also face this problem. Business income per worker is expected to amount to €59.000 this year, which is €54.000 lower than in 2021 and more than 40% below the average of the previous five years (2017-2021).
Farmers are making good progress
Arable farmers see their farm income rise due to higher average prices and good crop yields. The estimated income for the 2022 harvest year is €133.000 per worker. This is an increase of more than €50.000 compared to 2021 and almost €80.000 above the multi-year average of 2017-2021. They benefit from better prices for onions, potatoes, grains and beets. This kept them ahead of cost increases.
WER signals that the price for onions seems to be at a good level again. This is also related to a lower supply. Production elsewhere in Europe is disappointing. For the 2022 harvest, prices are expected to more than double compared to 2021.
Potato price +50%
For consumption potatoes harvested in 2022, a clear price increase of around 50% is expected. The harvest in the Netherlands is at a good level, while less has been harvested abroad. A higher price is also estimated for sugar beet for harvest 2022 (+25%). Grain prices rose sharply in March due to the war in Ukraine. Ukraine and Russia are also major players in the global grain market. Due to the situation there, a price increase of grains is estimated for the 2022 harvest year of 20%.
Lower incomes in greenhouse horticulture and fruit growing
The average income from greenhouse horticulture businesses falls by around €100.000 per worker to a good €175.000. This is also €35.000 below the average income in the period 2017-2021. This year, the incomes of greenhouse growers are under great pressure due to increased costs, lower consumer confidence, higher inflation and variable yields.
The average income in fruit cultivation for the 2022 harvest year is estimated at minus €7.000 per worker. This is about €70.000 lower than the 2021 harvest year, which has gone down in the books as a good year for fruit growers. The sharp fall in income is the result of a lower price of pears and apples in particular. There is a greater production of both in the EU.
Klaas van der Horst
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