Hungary: Heat wave hits, causing huge losses - What crops can farmers pin their hopes on now?

Confidence in sunflowers high, profits might be great this year

Farmers in Hungary continue to trust sunflower crops, reports Agrárszektor.hu. The sowing area of sunflower has only slightly decreased by 2% compared to last year.  The production area is much larger than preliminary estimates by experts suggested, who projected a larger decrease. The crops are now in the star bud stage, and so far, there haven’t been significant issues with pests.

The production area of sunflower has continually increased in the past 20 years, reports the portal, and in some years, it has surpassed 700 thousand hectares. This year, sunflowers were planted over 699.9 thousand hectares of land.

Agrárszektor also reports that in Hungary, sunflower is the third most important crop in arable farming, and it is one of the best-adapted crops to the increasingly chaotic precipitation pattern in the country caused by climate change. The portal interviewed farmers who all reported expected yields of 3-4 tons/ha. The price of sunflower in the last week of May was €367.6/ton for high-oil-content sunflower seeds, and €370.7 for industrial sunflowers.

Durum wheat showing great promise

While other crops that are harvested in the summer are showing mediocre yields this year, durum wheat appears to be more profitable this year, reports Agrárágazat.hu.

Durum yields in the EU are 4% lower this year, making Hungary’s mean yields (5.3 tons/hectare) one of the highest this year. At the same time, the country’s Eastern trade rivals, Russia and Belarus are not doing well on the European market. This is partially due to lower yields, however, European tariffs “effectively banned” Russian and Belarusian goods, reports Agrárágazat. This creates good opportunities in the durum wheat market, writes the portal.

In the long term, Hungary cannot compete with Ukraine, reports Agrárágazat, at least not in terms of quantity, but for now, it would be profitable to stay in the race, writes the portal. This year, Ukrainian grain exports are also decreasing. In June, exports began to significantly decline. By the end of the month, the export of Ukrainian agricultural products by road was 261 thousand tons, which is significantly lower than the May monthly figure (426 thousand tons), and warehouses are almost empty. But this won't always be the case: Ukraine is planning to increase durum wheat production.

Heat wave hits maize fields, yield losses to soon reach 1 million tons

Agrárszektor.hu reported on Thursday on the unexpected effects of the current heat wave that hit Hungary this week. Even last week, record maize yields were expected due to the warm spring, the relatively good precipitation, and the summer heat, which has sped up plant life cycles in nature as well as in agriculture. However, this week an unexpected heat wave hit Hungary, and while maize crops have already passed their critical flowering period, the current weather is much more than what the plants can handle.

The shocking heat wave has hit maize fields with brutal force, and according to industry experts interviewed by the portal, damages can reach a yield loss of 1 million tons within days as crop yield loss models suggest that in the current weather, around 200 thousand tons of corn is  lost every day. If the current hot weather persists, without rains, losses might approach 1.5 million tons.

Even if the soil has enough humidity, providing access to water to the crops, if maize plants developed in relatively “comfortable” conditions, they can’t handle the sudden heat, said one expert, with the heat scorching the plants’ leaves, damaging yields.

In Hungary, 6-8 million tons of maize can reasonably be expected in good years, and the crop is one of the major exports of the country. In 2014, Hungary’s maize yield was 9.4 million tons, however, due to the catastrophic drought in 2022, the total maize yield was 2.8 million tons in the country, and Hungary had to import corn for the first time in living memory. Last year, the country produced 6.3 million tons, however, due to the terrible season in 2022, the production area of maize has already started declining.

Some experts are saying that it is not out of the question that 30 to 40% of the harvest might be lost. Due to the heat, maize fields in Transdanubia, in West Hungary, might see a yield decrease of 1 ton/hectare.In other regions in Hungary which have been struggling with drought, the current heat wave might lead to a 2 to 3 tons of yield decrease per hectare.

Wheat, maize prices declining

According to the latest data from the Market Price System (PÁIR) of the Institute of Agricultural Economics (AKI), wheat and maize prices were generally lower than last year on week 26, the last week of June.

Milling wheat was €172.89 per ton, which is 3% higher y-o-y, but 3% lower than the price in week 25. In the 22nd week of 2024, the price was €190.73/ton. Feed wheat was €166.45/t. This shows a 3% decrease y-o-y, and a 2% decrease from the previous week.

Feed corn (maize) was  €169.29/t, which shows a 4% decrease from week 26, 2023, and it is also 7% lower than the price in the previous week. Feed barley was €136.17/t, which is 8% higher than the price last year.

Government to introduce “protection contributions”

This week, the government introduced a set of extra taxes, as well as kept in place the extra profit tax previously introduced in retail trade. According to Minister of the Prime Minister’s Office Gergely Gulyás, “Every multinational company that has made excess profits during wartime must pay a defense contribution. The defense contribution goes into the defense fund.” This will affect the banking sector, multinational companies and energy companies.

Higher transactional taxes and fees in the banking sector will increase costs, and a currency exchange tax will be introduced. The government aims to increase its tax income by €1.02 billion with the austerity measures.

Hungarian aquacultural output decreased last year

The news portal Agrárszektor.hu has reported on the macro picture of aquaculture in Hungary based on data from last year.In 2023, 90% of the fish farms in Hungary were operation. Only 20 hectares of new farm ponds were built, with pond reconstruction being completed over 30 hectares.

A significant portion of domestic fish production comes from fish farms (farm ponds), which operated over an area of 26,836 hectares in 2023. The amount of fish produced in intensive systems decreased by 10.3% compared to the previous year, totaling 5,664 tons, of which 4,386 tons were produced for consumption purposes. The volume of pond-based fish production in Hungary was 19,673 tons in 2023, which is 7.3% lower than the previous year's amount. In 2023, 80.0% of fish production was concentrated in three regions (Northern Great Plain, Southern Transdanubia, and Southern Great Plain).

The export value of fish and fishery products reached €26.5 million in 2023, while the import value was €133.3 million. The trade balance deficit of €106.8 million exceeded the 2022 deficit by €7.9 million.

The primary fish species in fisheries remains carp, which accounted for 82% of farmed fish meat production for consumption in 2023.

Spar spent €46 million on food processing developments

Trademagazin.hu reported on Wednesday that SPAR Hungary has spend €46.9 million on the establishment and development of its two meat factories and its convenience food factory in Hungary.

The company’s first facility, the Regnum meat factory in Bicske, Fejér County, in Transdanubia, served as a source of high quality own-brand meat products. Further developments in production control and emissions have made the factory more sustainable. The company also bought a meat factory in 2020 in Perbál, in Pest county, near Budapest. In the plant, significant developments have recently been made regarding the energy system: a carbon dioxide-based, transcritical cooling system has been installed, which is the most supported solution in Europe in terms of emissions reduction.

The company also built the SPAR enjoy. convenience plant in 2018 as part of a greenfield investment. Experience gained at the Regnum meat plant in Bicske was used in the design of new food factory's energy system and technology. In recent times, the company has carried out several developments in the plant, which meets the highest food safety standards. For example, the lighting was recently replaced with LED lamps to save energy.

Hungary’s largest biodiversity-ensuring gene bank expanded

The Ministry of Agriculture has announced in a press statement that a new building has been constructed at the largest domestic gene bank in Tápiószele, in Pest County, in Central Hungary. In the newly inaugurated building of the National Biodiversity and Gene Conservation Center (NBGK), two deep-freeze chambers were installed, which, after proper preparation, are capable of storing the preserved seed samples for up to 100 years, reads the statement.

The Ministry also added that today, the gene conservation center is “ranked among the top twenty in the world”. It holds 50% of all domestic plant genetic resources and is the only facility in the country to carry out comprehensive gene bank activities. Its primary mission is "gene conservation and variety protection.”

The new building cost €2.5 million. The facility includes one temporary storage unit, three seed drying chambers, and two cold storage units that ensure the long-term preservation of seeds at -20°C. The chambers can accommodate a total of 2,440 crates, providing a storage for the gene bank for the next 20 years and helping to address current logistical challenges. Additionally, the building houses the viability laboratory, offices for the gene bank administration staff, and rooms supporting professional activities.