Hungary's food prices rose further in 2023

Food sales prices up by 4.8% y-o-y

The latest statistical data by the Central Statistical Office (KSH) indicates that the mean sales prices of the food industry increased by 4.8% from the same period last year. In general, industrial producer prices decreased by 2.5%, domestic sales prices are up by 7.8%, export sales prices are down by 7.5%.

KSH’s report adds that while export prices were down, the prices on the domestic energy market increased significantly. In the industrial producers price increase, the increase of material costs and production costs played a major role. The food industry’s producer prices also increased 1.7% m-o-m.

The issues of the Hungarian pig sector

This week, Agrárszektor.hu has interviewed Péter Szappanos, general manager of one of Hungary’s leading meat producers, Pápai Hús Kft. The company head said that two previously famous pork categories, fatback & bacon, and pig slaughter selection (liver and blood hurka sausage and head cheese) are becoming less popular due to the demand dropping in younger generations. Mr. Szappanos also remarked that from the business side, poultry and pork feel like two entirely separate industries, although they both share a gradual decline in consumption of 1-2% annually.

On competitiveness, the businessman commented that on a European level, the pig sector is probably economically sustainable as the EU is a leading exporter, so even if production decreases, Europe’s pig sector will still be self-sustaining. However, there are major differences between subsidies in member states, making the market competition “an unfair arena.” On the issues of the European pig sector, Mr. Szappanos remarked that there is a long lead time for the increase or decrease of slaughter pigs, with a year-long time window, while in the case of poultry, this lead time is 1 to 2 months. In the case of the Hungarian market, prices are very dependent on the German domestic market price, which is formulated in a process that is entirely not transparent to Hungarian producers, says Mr. Szappanos.

Meat processors, therefore, take a significant risk with volatile and unpredictable prices, adds the manager. However, Hungarian meat processors “can only blame themselves,” Mr. Szappanos adds, “as no one is forcing us to adhere to the [German prices].” In the spring of 2023 for example, pork prices rose even higher than what the high feed and energy prices justified, and such hikes make the processing business unprofitable, says the expert.

Hungary’s dairy industry is struggling

Agrárágazat.hu has recently published an analysis on Hungary’s dairy industry and concluded that although the industry is stabilizing on the European level, Hungary’s domestic industry is struggling with the ongoing economic crisis.

The article highlights that the procurement figures of raw milk is now “worse than in years,” and that purchase prices further fell by 20% compared to 2022. Although the decrease of the producer price of milk stopped after the first 7 months of the year, the September price of €0.4/kg was 20% lower than in the same period in 2022 and 30% lower than the price in January. The export of raw milk also increased by 12% y-o-y by September.

The high rate of export of raw milk is an unfavorable situation for the dairy industry as processed dairy products have a massively higher added value.

Rabbit meat production might see export opportunities

The National Chamber of Agriculture (NAK) has reported this week that although the Hungarian rabbit meat sector has seen production decreases in the past year, it might still be at a comparative advantage on the Western European market. NAK and the Rabbit Meat Product Council industrial alliance both concluded that compared to a good year for the industry last year, in 2023 production in the domestic industry fell by 20%, however, rabbit farmers in France, Italy and Spain saw production decreases of around 30%.

The portal also writes that in 2022, more than fifty large-scale rabbit farms in Hungary produced 10.3 thousand tons of livestock, which entirely fill up the country’s slaughterhouse capacities. Hungarian consumers do not really prefer rabbit meat, making the domestic industry mostly export-oriented. The economic difficulties and increasing production prices caused difficulties in the industry in Hungary, and the industry also faces a global challenge, a highly contagious fatal hepatitis infection of wild and domestic rabbits in Europe, called rabbit haemorrhagic disease (RHD).

A good year for pumpkins

The National Chamber of Agriculture (NAK) and Hungary’s largest fruit and vegetable producer alliance, FruitVeB report that pumpkin consumption is increasing in Hungary and that favorable weather conditions made for a good pumpkin season this year. Hungary’s winter squash plantations total 1,626 hectares this year, which is a slight increase from 2022. The domestic harvest comes at around 35 to 40 thousand tons, which more or less covers the domestic consumptions, so imports are negligible. Hungarian farmers usually plant a few varieties, including large cultivars like the Muscade de Provance pumpkins of Nagydobos, and the Hokkaido variety of the red kuri squash. The Nagydobosi squash is currently emerging as a brand.

Hungarian winner in prestigious contest of women winemakers

The viticulture portal Hungarianwines.eu reports that in the contest of women winemakers of the German wine portal selection.online.de, Zsófia Kövesdi of the Jammertal Wine Estate has won the “Female Winemaker of the Year 2023” award. Ms. Kövesdi competed with 40 other contestants. The Jammertal Wine Estate is located in Hungary’s southernmost wine region, Villány, in Baranya County, in South Hungary.

Located in southernmost tip of Transdanubia, the Villány Wine region is named after the epynomous town and mountain range, the southern slopes of which are excellent for wine production. Baranya county is famously one of Hungary’s southernmost and warmest regions with a sub-Mediterranean climate which is warm enough even for the open field plantation of figs.

The selection of nine vintages made by Ms. Kövesdi all received gold medals, with one top-gold medal.