The Flemish greenhouse vegetable growers are heading for a production increase of 3.4%, according to the Boerenbond in an interim evaluation for the first seven months of 2019. On average, prices are the same as those of 2018, excluding price fluctuations due to production highs and lows. In the case of small fruit, the growth in the number of companies is striking, in line with the entered growth trend.
With the increase in production, the Boerenbond mainly refers to tomato growers, bell pepper growers and cucumber growers. 'Decent' price increases were noted in the tomatoes, while the prices of cabbage lettuce and cucumber declined. The overall turnover, just like production, increases by 3.4%.
In the publication 'Annual results for agriculture and horticulture 2019', the Boerenbond also mentions the growing number of companies with small fruit. There is an increasing diversification in the productions (for example cherries, various kinds of berries such as blueberries and redcurrants, gooseberries, blackberries, kiwi berries and raspberries) that respond to new consumption trends. Productions recovered in 2019 compared to 2018. For example, 2019 was a very good year for the cherry harvest.
In floriculture, whereby the tree nursery realizes 60% of the Flemish annual turnover and the ornamental plant growers 40%, showed varying results.
In the tree nursery sector the acreage remains unchanged. The number of trees produced and sold decreased due to the drought and the production shortage of seeds. The decrease in yield is estimated at 5%. There was, however, a price increase of about 5%, as a result of which the turnover remains more or less stable.
The Boerenbond sees various developments between the subsectors in the floriculture sector. In the sector of green plant in 2019, there is both a production increase and a price increase which increase the overall turnover. The demand is currently greater than the supply. As a result, prices are somewhat on the rise.
The production of bulbs and tubers experienced an increase in 2019 compared to 2018 by around 5%. Because of the heat, the yield is lower than normal, but still higher than in 2018. Begonias are the main bulb cultivation in Flanders.
The produced quantities for cut flowers remained the same compared to 2018, while prices fell by about 15%. For example, the prices for carnations fell by 5%, while the prices of the roses had to deal with a decline of 15%. We have to wait and see what the autumn of 2019 will bring.
There are very different signals for flowering plants. Overall, a slight price increase (+3%) is assumed, while the produced quantities are expected to decrease slightly (- 2%).
While income does not increase everywhere, the costs do increase. Among other things, the Boerenbond reflects on the cost of labor. The wages paid to employees in agriculture and horticulture represent 10% of the direct costs. For 2019, the estimate is that labor costs will increase by 1.8% (estimated inflation). This is an estimate since a substantial part of the work takes place in the third quarter. In the past period, it has also been established that labor shortages lead to rising wage costs. The latter, however, is not included in the figures.
It is true that the weight of the paid wage costs varies greatly between the subsectors. For example, horticulture, in particular, relies mainly on externally paid labor where, depending on the cultivation, wage costs can take up to 30% of the total costs.
Energy prices, accounting for 8% of total direct costs, experienced a stable trend in the first 8 months of 2019 compared to the same period in 2018. Electricity prices recorded a limited increase, while gas prices fell slightly. It is important that farmers and growers continue to focus on their own (green) energy production via CHP and solar panels.
The amount of used plant protection products, viewed across all agricultural and horticultural sectors, rose by 2% in 2019 compared to 2018. The disease pressure in 2019 was slightly higher than in the dry year 2018. In 2019, the prices of plant protection products rose by about 2%. Plant protection products make up 3.5% of the total direct costs. The Boerenbond has established that continuously fewer crop protection agents are permitted and that at the same time the alternatives are considerably more expensive.
To monitor the profitability of companies, the Boerenbond makes in vegetable cultivation use of the turnover data of the Association of Belgian Horticultural Auctions (VBT). A short overview of products is looked at, namely tomatoes, greenhouse lettuce, bell pepper and cucumber. Figures are also compiled on the basis of the auction supplies and average monthly and quarterly prices for these vegetables. The direct costs for these vegetables come from the Boerenbond Tiber accounts.
Profitability barometer greenhouse vegetables
The profitability of greenhouse vegetable growers improves thanks to favorable prices for tomatoes, peppers and cucumbers in the summer period. This barometer is calculated in line with the profitability barometer for open field vegetables for a basket of products, namely tomatoes, greenhouse lettuce, bell pepper and cucumber.
After an increase in the spring of 2018, the profitability index fell in the summer months from 2018 to the average over the period 2014 - 2018. The explanation is the heat from 2018, whereby mainly the supply of tomatoes in the short term saw a very sharp increase, resulting in price drops.
The profitability index has improved in recent months. The increase is almost entirely explained by the higher volumes and good prices of tomatoes in the months July and August of 2019. The pricing for bell pepper, cabbage lettuce and cucumbers was also decent.
All agricultural and horticultural sectors combined
For 2019, an 'average year' with 'large variation' is reported. There is some recovery compared to a difficult and dry 2018. A sector-wide estimated turnover of 5.3 billion euros is recorded.
In the period 2009 - 2019, the turnover of Flemish agriculture and horticulture increased by 16%, while the direct costs (ie excluding own labor and fixed costs) increased by 19%. This means that overall margins in the agricultural and horticultural sector are under pressure. The ratio between gross revenue and direct costs in 2019 is at the same level as in 2009. At the same time, the Boerenbond notes that the margins over the past 10 years have been particularly volatile. "It remains a sad conclusion that the Flemish agricultural and horticultural sector is not able to quickly pass on the rising costs to the next links in the chain. Precisely because of that, pressure on the margins continues."