Hungary: Inflation tops EU charts while profit margin cap hurts domestic food industry

Hungary back on top again in EU inflation ratings

444.hu reported this week that Hungary is back at the top of the EU’s inflation chart, for the first time since 2023. In the period of 2022-2023, the country led the chart for 12 consecutive months, until November, 2023. In January, 2025 and then in February, Hungary was at the top of the chart again. The February inflation figure was 5.7%, while the EU average was 2.7%. The Dutch figure in February was 3.5%.

In twelve member states, the portal writes, as well as in the eurozone, and in the EU as a whole, inflation slowed down in February (From 2.5% for the eurozone to 2.3%, and from 2.8% to 2.7% for the whole of the EU.) In Hungary, however, inflation accelerated by 0.2% in the month of February.

Romania had the 2nd highest figure with 5.2%, France had the lowest inflation with 0.9%.

Profit margin cap hurts domestic food industry

Agrárszektor.hu writes that Hungary’s domestic food industry is now at a disadvantage against its foreign competition thanks to the government’s profit margin cap policy.

“It is extremely embarrassing for Hungarian food industry companies that their previously hidden supplier prices for the products covered by the policy have essentially become public knowledge,” the portal writes.

The policy, which limits retailers’ maximum markup at 10%, has instantly made previously carefully guarded supplier prices public, the portal elaborates. "By legally capping the retail margin for the products in question, supplier prices can be easily calculated. This provides a crucial source of information for foreign manufacturers as well as individual retail players. One retail chain can thus see the price at which a food industry player sells a given product to another chain," commented Tamás Éder, head of the Responsible Food Manufacturers’ Alliance (FÉSZ) to the portal.

The expert added that with the current level of import pressure, restrictive policies spur traders’ efforts to seek out cheaper import products, and this can be expected with the new profit margin cap policy as well.

László Bárány, owner of food manufacturer Master Good group, also commented that supplier prices had been a closely guarded trade secret, as companies sold to different retail chains at different prices. „So they just basically stripped us naked, had us stand in the middle of main square, and told us to spin so that everyone can see everything clearly,” the company owner told Agrárszektor.

Foot-and-mouth disease: epidemiological investigation underway, culling to start soon at site of second infection

We have reported on Wednesday, March 26 that a second infection of foot-and-mouth disease (FMD) had been confirmed in Hungary.

On Tuesday, March 25, the disease appeared at a fourth location in Slovakia, multiple news portals in the country reported. On Wednesday, 24.hu reported that Slovakia decided to close all but the major border crossings to freight traffic transporting susceptible animals along its border with Hungary due to the spread of FMD, Interior Minister Matúš Šutaj Eštok announced.

Meanwhile, the Slovakia-based portal Új Szó has reported on Thursday, March 27, that  citizens in the country started stockpiling food as they fear shortages in meat and dairy.

On Thursday morning, a massive traffic jam formed on the M15 highway near the Rajka border crossing between Slovakia and Hungary due to the mandated disinfection of trucks.

Also on Thursday, at a governmental press conference, Hungary’s Minister in charge of the Prime Minister’s Office Gergely Gulyás has stated that the damage assessment was still ongoing, and the Hungarian state will compensate farmers. “For now, the economic impact of the outbreak is not yet significant,” Minister Gulyás concluded.

Later in the day, Hungarian Minister for Agriculture István Nagy posted a video on his Facebook page. The Minister announced that a 3-kilometer protection zone and a 10-kilometer surveillance zone have been established around the site of the second outbreak. A transport ban on susceptible live animals has been imposed in the Győr and Mosonmagyaróvár districts until midnight on Saturday, March 29. Additionally, grazing and hunting bans have been enacted, and zoos will remain closed.

The Ministry of Agriculture has also prohibited all exhibitions and fairs involving susceptible animals in the affected areas. Minister Nagy urged farm managers to organize the isolation of their workers to help prevent the spread of the virus.

Meanwhile, the Great Plains Animal Husbandry Days, Hungary’s leading livestock expo, was cancelled this year due to the FMD outbreak.

Poultry and pig figures increased in 2024

Based on the latest livestock sector figures by the Central Statistical Office (KSH), the Oeconomus Economic Research Foundation reported on the 2024 trends in Hungary’s animal husbandry sectors.

The pig, chicken, and turkey populations have increased, while the number of cattle remained for the most part unchanged. Hungary accounted for 1.2% of the European Union’s cattle stock and 2.1% of its pig population. In 2024, compared to the previous year, livestock farmers recorded growth in chicken and pig numbers but a decline in sheep.

The dairy cattle population increased by 5 thousand heads in 2024, and the amount of cow’s milk sold also rose. Last year, the industry sold in total 1.6 billion liters of milk, representing a 7.5% increase compared to the 2023 figure.

The pig population recorded a 7.5% increase in 2024w, with 2.8 million animals registered in Hungary as of December 1 of the previous year.

The number of chickens grew by 2.4% by December 1, 2024, raising the total stock to 29.4 million. The average purchase price of table eggs was 41 forints per piece, which was 3.3% lower than in 2023.

Both the duck and goose populations declined, with the duck population dropping by 57% and the goose population by 34% compared to the previous year.

The situation was better for turkey farmers. In December 2024, Hungary's turkey population was recorded at 2.2 million, representing an 8.6% increase compared to 2023.

The sheep population, however, declined by 6.6% in 2024, bringing the total to 847 thousand animals.

Water management to use controlled floods in order to battle drought

The National Water Directorate (OVF) has flooded a grazing meadow on Wednesday, the organization reported in a video on its Facebook page, and this is the first step in a positive change in water management in Hungary. While floods bring large amounts of water into the country, summer droughts devastate nature and agriculture. The search for solutions for flood water retainment has been a central theme in discussions about environmental sustainability in Hungary for decades.

OVF has made water retention efforts in the past, however, the directorate can normally only operate on state-owned lands – Channels, backwaters, fishing lakes and reservoirs. A report on Telex.hu commented that farmers’ willingness to offer lands for water retainment purposes has been low because land covered with water could not be eligible for EU area-based subsidies for a long time.

There has been a change in this regard. The Ministry of Agriculture has introduced the concept of “land used for ecological water replenishment” at the beginning of 2025, which allows for the periodic flooding of agricultural land with a water rights permit. The new regulation makes it possible to subsidize lands flooded for water replenishment the same way as cultivated lands.

On February 19, the OVF launched an online platform where farmers can offer their land for water collection, and the OVF evaluates whether this is feasible for the given area. In just over a month, more than 370 individuals have expressed this intention.

The owner of the pasture that was flooded on Monday stated that in the summer, “the land is almost smoking, it’s that dry,” and that even the 30-meter-deep wells in the area run dry. The farmer hopes that the water retainment flood will replenish soil water levels and that his pasture will remain green in the coming summer.