Revenues in the agricultural sector have dropped this year. In comparison with 2017, agricultural income declined by almost 11 percent. While 2017 was a good year for farmers, with agricultural income exceeding the 1995 level for the second time in more than two decades, income has now declined across a broad front. Agricultural income per annual work unit fell below that level again in 2018.
Agricultural income has been under pressure throughout the past two decades. This is related to price developments of agricultural products, rising supply on the world market and increased input costs of such products as animal feeds and natural gas. Between 1995 and 2018, total agricultural output rose by 25 percent, coinciding with a 5-percent decline in total agricultural income.
Lower agricultural output
In 2018, total agricultural output volume was 1.4 percent down on the previous year. The lower level of sales in arable farming and horticulture was partly due to poor harvests as a result of extreme drought and exceptionally high temperatures throughout the Netherlands. Output declined in the livestock sector as well. Slightly increased output prices compensated somewhat for the lower production value, resulting in final agricultural output at only around 1 percent below the level of 2017. The lower production value had a downward effect on revenues, partly exacerbated by a 3-percent rise in the value of consumption over the same period.
Lower crop yields, due to drought and high temperatures
In the Netherlands, output in arable farming is greatly affected by the largest sector, that of flowers and plants. Their production value, which is good for almost half of the total production value in the plant sector, was at similar levels as one year previously. Relatively poor results were seen in cut flower production, whereas plant production improved year-on-year. Arable farmers had lower yields this year as a result of extreme drought and exceptionally high temperatures around the country. Fewer potatoes were harvested in comparison with 2017. Harvest yields of onions and cut maize were far below 2017 levels. The short supply drove up the prices of most plant products to much higher levels year-on-year.
In horticulture, greenhouse vegetables suffered from the drought as well. Not only did yields fall below expectations, but the quality of the vegetables was poorer as well. Apple and pear harvests were not as much affected by the drought in general as the trees were given extra water.