Rising costs are a blow for Belgian growers

In 2021, dismal weather put a damper on, among others, Belgian pear and tomato yields. Both energy and fertilizers are also rising. That is according to Statbel, Belgium's statistics office. They shared this in a post accompanying the first 2021 agricultural and horticultural income estimates. The European Commission (Eurostat) released these.

Statbel reckons the agri-sector's production value rose by nine percent in 2021. However, intermediate use should increase by 15.4%. The costs increases will probably bring agriculture's net added value down. Labor wages and government transfers (taxes and subsidies not directly related to production) payments must be considered. Then, production factors income should fall by 7.2%.

Evolution of production's total value, intermediate use, and the net added value in million euros.

Energy prices
Increased intermediate use is largely due to the evolution of production material prices. Energy prices fell last year. However, they more than made up for that this year. That has affected not only the fuel consumption. It also affects fertilizer prices. That is because gas is an essential part of manufacturing nitrogen fertilizers.

Some industrial companies have, considering rising production costs,  stopped producing fertilizers. That further increases prices and the risk of shortages. Annual fertilizer prices are estimated to be 1.5 times higher than last year.

Rising tomato prices
Strawberries, berries, and apples had successful harvests. In contrast, pear production is falling in Belgium and elsewhere in Europe. The frost in April and the rainy summer reduced production. Current sales prices are expected to offset these losses.

Fruit production's value should increase by 32.6%. That of vegetables will probably rise by only 2.4% compared to 2020. There could be a decrease in production volume, especially of tomatoes. And a 6.8% price increase.

Source: Statbel

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