Hungary: A massive decline in cereals, farmers on the search for new crops

Analysis: Hungarian cereal production dropped drastically

The news portal Agrárágazat.hu has recently published a short analysis on the changing trends of cereal farming in Hungary, based on time-series data sets from the Central Statistical Office (KSH). In the past five years, the production area of cereal crops declined by more than 120 thousand hectares, which is a decline that, according to the analysis, cannot be explained by even climate change alone. In 2018, the production area of cereals was 2.37 million ha, in 2022, the figure was 2.25 million ha. However, mean yields did not increase, so the decrease of production area does not suggest an efficiency increase in cultivation methods either.

Yields have similarly declined in the past 5 to 6 years. The aggregate mean of cereal production yields had been at least 6.3 tons/ha throughout the country in the years before 2022.

The nationwide average for maize barely reaches 8.2 tons/ha this year, falling short of the harvest levels seen in 2018 (8.5 t/ha) and 2020 (8.6 t/ha). The maize cultivation area is also shrinking. While typically the production area was 1 million hectares before 2020-2021, last year saw a decrease to 816 thousand hectares. This year, the number hasn't risen above 860 thousand ha.

Barley is performing well, steadily increasing in the harvested area from 244,000 in 2018 to over 330,000. The national average yield is also on the rise. In 2018, it stood at 4.7 tons per hectare, followed by a record-breaking 6.4 tons in 2021. Even in the challenging year that was last year, this figure did not drop below 4.8 tons. This year, it is at 5.5 tons per hectare.

Even though last year was an outlier due to the 2022 European drought, which devastated agriculture throughout the continent, what is worrying is that Hungary’s maize production suffered by far the worst damages, with a shocking production decrease of 57% in 2022 compared to the five-year average, and sunflower saw similar production declines.

The analysis concludes that these changes explain why many farmers are searching for alternative crops, based on more stable market prices, lower input costs, lower levels of climate vulnerability. These include rose hip, herbs, soybean and sweet potato among others.

Worrying livestock disease updates

Agrárágazat.hu reported this week on livestock diseases which are currently present in Hungary. Avian influenza continues to spread in the country (we have reported on this development in our previous Hungary briefing). On Wednesday, the National Food Chain Safety Office (NÉBIH) has announced that the disease was also identified at a fowl farm near Orosháza, in Békés County, in the Great Plains. The animals showed no symptoms, the laboratory however, identified the H5N1 strain of HPAI during the routine testing of samples before transport. The fowl farm had 7400 geese.

Another disease was recently also identified. In Szabolcs-Szatmár-Bereg County, in the carcass of a beef cattle that died showing neurological symptoms, NÉBIH identified the presence of rabies.  

An epidemiological investigation about the case has been launched by the office, and NÉBIH also implores the public to notify them of wild or domestic animals which behave strangely, show neurological symptoms, as the viral disease is a danger for all animals as well as humans. The news portal also reports that due to previous cases of rabies, various epidemiological measures have already been put into place at the game management area where the carcass was found.

While the Dutch tomato export decreased, tomato import increased in Hungary

Agrárszektor.hu recently reported on the annual changes of the tomato market in Hungary based on data from the Institute of Agricultural Economics (AKI) and the Central Statistical Office (KSH). There has been a 9% increase, to 15.4 thousand tons, in the category of fresh or chilled tomatoes import in the first 8 months of 2023 in the country. However, according to the October projection of the World Processing Tomato Council (WPTC), the quantity of industrial tomatoes in Hungary is expected to increase by 38 percent to 110 thousand tons in 2023 compared to the year 2022.

Import from Slovakia increased to 4.24 thousand tons (an increase of 10%), and from Turkey it rose to 1.94 thousand tons (6%). From Spain, imports decreased to 4.79 thousand tons (a decrease of 2%).

Industrial tomato production might increase globally, by 13.3% to 43.5 million tons, in 2023. Spain’s tomato export decreased not only in Hungary but also on the European Market as a whole, by 8% to 357.7 thousand tons. Dutch tomato exports also fell by 8% on the European market in the first eight months of the year, to 477.5 thousand tons.

Mandatory discount measure to be kept in place until June 2024

The Ministry of Economic Development has announced this week that the government’s mandatory discount regulation, which applies to grocery retailers, will be kept in place until the end of June, 2024.

The mandatory discount measure was introduced in April this year. Based on this regulation, grocery retailers are obliged to offer weekly discounts in twenty separate product categories. In June, after the government had abolished its policy on the price capping of basic food items, the mandatory discount measure was kept in place and expanded.

According to the Ministry of Economic Development’s release on the current extension, „2023 [has been] the year of breaking inflation and 2024 [will be] the year of restoring growth”. According to the Ministry’s release, the government hopes that the measure will contribute to “further decreasing” food inflation.

In September, the news portal 24.hu had reported that mean consumer prices were 16.4% higher in 2023 y-o-y, however, food prices had risen by 19.5% compared to September, 2022. In October, the news portal 444.hu reported that the food inflation level was 15.2%. Inflation was 12.2% in the national economy. The portal highlighted that on the one hand, inflation decreased due to economic effects, e.g. the decreasing prices of energy carriers, however, on the other hand, the base effect had a major role in the trend, since the inflation rate was 20.1% in September, 2022.