Will a new crop thrive in Hungary's changed climate?

Will food prices climb higher?

In July 2024, consumer prices were on average 4.1% higher than in the same period the previous year. This was reported by Pénzcentrum.hu. The portal writes that Hungarian consumers could still not escape brutal price hikes in the past period. The highest increase in price was that of granulated sugar, which surged by 57.5%. UHT milk and chicken breast fillets saw increases of 33.7% and 27.6%, respectively. Additionally, pork thigh (leg), also saw a significant price increase, each exceeding 20%. A few products saw price decreases, e.g. onions, which were 27.4% lower y-o-y.

Between June and July, a few seasonal products saw price decreases. The price of tomatoes fell by 16.6%, and cucumbers, onions, pears, and butter also saw average price reductions of more than 5%. Green pepper prices dropped by 26.5%, while early potatoes and watermelons became over 20% cheaper. However, the m-o-m price increase by July was generally substantial. The price of flour increased by 46.6%, UHT milk by 24.8%, and granulated sugar by 18.1%. Other foods, such as carrots, chicken breast fillets, and sunflower oil, also saw price hikes of more than 10% in one month.

Wheat and barley harvest yields are average, both domestic and export supply secure

Trademagazin.hu reported that the Minister of Agriculture, István Nagy, has declared the harvest to be successful when he spoke at the Carpathian Basin Wheat Harvest Festival in Somogyvár.

According to the Minister, compared to previous years, the harvest concluded with medium yields. In terms of summer-harvested crops, there was a significant surplus beyond the country's needs, resulting in an export supply of several million tons. 

This year, winter wheat was grown on more than 864 thousand hectares, says Mr. Nagy, with a national average yield of 5.8 tons per hectare. This slightly surpasses both last year's and the past five years' average yields. The highest averages were reported from the counties of Baranya, Tolna, and in Vas, in southern and in western Hungary, respectively. Based on yields and acreage, nearly 5 million tons of wheat were produced this year, more than enough to cover the annual domestic consumption of around 3 million tons.

Agrárszektor.hu reported on the harvest performance on Monday. State Secretary Zsolt Feldman of the Ministry of Agriculture has stated that the winter barley production area was 260 thousand hectares, smaller than last year, and the yield was 5.7 tons/ha on average, which is a little higher than last year, writes the portal.

Maize: Promising year turned into disaster

Earlier in the summer, maize looked promising. Then the heat wave hit hard. Agrárágazat.hu now reports that farmers are facing a terrible maize harvest for the second time within three years.

In July, the expected domestic yield of fodder maize was further reduced in the projections, making even a 6.6-6.8 million ton harvest “likely a dream”. Some are forecasting a total amount of 4.2 million tons, writes the portal. Over the past 8 years, a similarly poor result was only seen in 2022. Generally, domestic cultivation can produce around 8 million tons of maize, which has, in the past, made it one of Hungary’s leading agricultural export commodities.

The decrease in quantity is not only due to this summer's heat waves and drought. A smaller planting area has also contributed to this. The area sown with maize has been reduced from 830 thousand to below 790 thousand hectares.

On the livestock feed market, shortages are not expected this year according to the portal, however, the price of fodder will substantially increase. Maize import can also be expected.

Drought continues

Agrárágazat.hu has also reported on the state of the ongoing drought in the country. By the beginning of August, 75 thousand hectares of farmland had been hit by drought. Each week, the area reported for drought damage increases by several tens of thousands of hectares, the portal writes, adding that this year, over 11 thousand agricultural producers have taken out drought insurance covering 713 thousand hectares.

Although this is substantial, in comparison, by this period in August, 1 million hectares had been registered for drought damage two years ago, during the 2022 European drought.

Currently, half of the water shortage-induced damages are concentrated in the counties of Bács-Kiskun, Békés and Csongrád-Csanád, in Central, South-Central, and South-Eastern Hungary.

In about 80% of the cases of registered drought-induced damages, corn and sunflower are the affected crops, but significant damage is also being observed in silage and sweet corn.

State Secretary Zsolt Feldman has stated that a new development is that, starting this year, the EU will also provide funding for the operation of the agricultural damage mitigation system. As a result, a significantly larger amount, nearly €87.5 million, will be available for payments by March 2025.

Wineries must diversify, says Minister

Minister for Agriculture István Nagy has said at a winery event in Somlóvásárhely that "the exemplary cooperation and adaptability of the winemaking community are essential for successfully adapting to the changing market environment." István Nagy emphasized that, “future partnerships within the winemaking community will remain essential, as there are signs of a structural crisis across Europe, and more broadly on a global scale. Consumption is decreasing, market spaces are shrinking, and the anti-alcohol lobby is very strong."

Mr. Nagy added that adapting to rapidly changing wine consumption habits is challenging. One way to address this is diversification, and the expansion of the range of products with sparkling wine and grape must. However, this requires new types of knowledge and technology, as high quality is increasingly expected across all price segments.

The Minister added that within the Common Agricultural Policy, €25-27.5 million will soon be available for the viticulture sector in the form of subsidies, aiding in ensuring the sector’s long-term sustainability and competitiveness.

Figs might have a bright future in Hungary

Figs are a complimentary crop in Hungary, with fig trees planted in gardens in the country’s warmer South-Western regions, and near Lake Balaton. However, with the changing climate, alongside oleanders, figs are one of the Mediterranean plants that can safely survive the growingly mild winters of Hungary.

Agrárszektor.hu recently interviewed Zsolt Medve, one of the pioneers of fig cultivation in the country. According to the expert, the first figs were brought from Italy to Hungary in the 15^th century by King Matthias Corvinus. There still are fig trees in the Buda Castle district, although whether these are the descendants of the figs of King Matthias is uncertain, Mr. Medve told the portal. At least one tree in the castle is 160 years old however.

Mr. Medve told the portal that although there are a few fig orchards in the country, Hungary is not yet a substantial fig-producing nation. Fig plantations mostly serve the demand of their local markets. However, with the changed climate, there is less and less frost damage in the winters, with increasing yields year after year.

Another issue is that an industry needs to be organized around fig production. Figs are not a typical market fruit, as they do not ripen after being picked, says the expert. Therefore, they need to be harvested when they are fully ripe and in this state they cannot be stored for more than a few days. They spoil easily, making it challenging to establish a system where this type of fruit can cover larger markets. What also complicates commercial fig production is the fact that figs continuously ripen throughout the season, making it impossible to harvest the produce at once, which means that orchards need to be scoured each day, consuming a lot of labor hours.

Small-scale cultivation already exists in the country, Mr. Medve told the portal. There are also businesses which process figs and manufacture fig-based products. However, there is still plenty of room for the development of domestic fig cultivation, says the expert.

The goals of the Hungarian presidency

"The goal of Hungary's six-month presidency of the Council of the European Union is for the Council of Agricultural Ministers to present its work in the form of conclusions to the newly formed European Commission, which will begin its term in the second half of the year, outlining the main directions of the Common Agricultural Policy after 2027," announced the Hungarian Minister of Agriculture István Nagy following a press conference after a meeting of the Agriculture and Fisheries Council (AGRIFISH) Council in July.

The Minister added that, "Since the Hungarian EU Council Presidency believes that the interests of farmers should once again be at the center of agricultural policy, creating a farmer-centered EU agricultural policy has been included as one of the central priorities of the presidency." The Minister also added that he had met with representatives of Copa-Cogeca before the council meeting.

Mr. Nagy identified strengthening the viability of rural areas and addressing demographic challenges as important objectives. The Minister also emphasized the importance of preserving European culinary traditions, which is fundamentally linked to informing consumers.

Regarding the Council debate on trade policy, István Nagy emphasized that “it is important to avoid having the agricultural sector once again bear the cost of geopolitical tensions and disputes affecting other sectors. Concerning Ukraine, the Council of Agricultural Ministers will closely monitor the developments in the trade partnership between the European Union and Ukraine, including the implementation of the Autonomous Trade Liberalization measure (ATM regulation).”

Regarding the creation of a knowledge-based agriculture as one of the priorities of the Hungarian EU Presidency, István Nagy stated that Hungary aims to launch a research program organized around  the needs of the Central and Eastern European region. This will focus on four key themes: Healthy soils; freshwater; food systems; and the promotion of creating higher added value locally.

Minister Nagy emphasized the importance of ensuring that considerations for Eastern Europe include not only the EU member states but also the Western Balkans, Ukraine, and Moldova, which are awaiting accession.