The agricultural sector has faced a challenging situation for several consecutive years, and currently, it is objectively not good either. As TV24 expert from the Farmers' Union, Valters Zelchs, points out, the main pressure on farms is related to high production costs, especially fuel and mineral fertilizer prices.
Although fuel prices have stabilized, they remain high. A similar situation is observed in the mineral fertilizer market — prices are no longer rising as rapidly, but they are still significantly higher than before. At this level of costs, even a good or very good harvest year does not guarantee that the farm can operate with sufficient profit.
One of the most significant challenges is the share of mineral fertilizer expenses in total costs. If a farmer earns about 1000 euros per hectare, at least 250 euros usually goes to mineral fertilizers. If the price of mineral fertilizers has doubled, these expenses can reach around 500 euros per hectare. Additionally, there are costs for seeds, fuel, land rental, labor, and other operational expenses.
In such conditions, making a profit becomes very difficult. It is even harder to cover previously accumulated obligations or to form a financial reserve for the coming years. This creates additional risks for the stability of farms and their long-term operations.
The situation is further complicated by climate policy measures introduced at the European level, including a new climate tax on mineral fertilizers. This increases production costs and further raises the price of agricultural products.
Zelchs emphasizes that the current difficulties are related not only to climate or weather conditions. The political and geopolitical situation also plays a significant role, under the influence of which raw material prices have sharply increased in recent years. It is unclear when and if they will return to previous levels at all.
Although the price of grain has increased by about 10%, this is not enough. Given the current production costs, a further price increase of 20–30% would be necessary for farms to feel more stable.
Overall, the situation in the industry is very tense. According to Zelchs, there is a risk that for some farms this year may be their last year of operation. While he does not want to dramatize the situation, the current conditions indicate that the financial stability of many agricultural producers is under serious threat.
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