Majority of German farmers on the winning side

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    Henner Schönecke’s red brick courtyard is located on a narrow thoroughfare with the descriptive name “Fliegenmoor”. Hamburg’s city limits run behind a moor belt and the Elbe marshland. It is an ideal location for a poultry business that sells regional free-range and organic eggs to wealthy city dwellers via its own market stalls and supermarkets.

    But things are no longer going well for Schönecke and his 100 or so employees. “They no longer buy what customers have wanted in terms of regionality and high quality over the past ten years,” complains Schönecke. With food prices soaring, people are turning to discount eggs at the lowest price.

    Schönecke therefore has to sell some of its high-quality eggs at low prices to processing plants that produce liquid eggs for industry. He can hardly afford it: the price of feed for his 50,000 laying hens has almost doubled – to 500 euros per ton. The item accounts for almost two thirds of the costs in his calculation.

    The rising costs of feed, fertilizer and diesel are throwing the farmers’ calculations upside down. The farmers’ association is loudly demanding new aid packages and high food prices. However, detailed calculations show that there are not only those who have suffered from the market turbulence, but also those who have benefited.

    A large number of farmers are expected to benefit greatly from the increased prices for agricultural products – especially those farms that keep few or no animals. “The arable farms are doing so well at the moment that they can’t stop smiling,” complains an industry expert. The blockade of the Ukrainian ports by the Russian military has caused world market prices for grain and cooking oil to rise sharply.

    Farmers who mainly grow wheat and canola are expected to double their profits before labor costs. Estimated conservatively, this gross yield for the coming harvest will be around 1000 euros per hectare.

    This is shown by a previously unpublished study by the agricultural economists of the federal Thünen Institute for the international expert network Agri Benchmark, which is available to WELT AM SONNTAG.

    According to the example calculation, if the times for buying and selling are chosen skilfully, the profit can increase even further. The picture looks particularly good for the oilseed rape crop. Depending on the size of the farm, additional profits of several hundred thousand euros can quickly come together.

    And that despite the increase in material prices of up to 175 percent compared to the pre-war level. The prerequisite for the calculation is that the grain price on the world market, which has risen by 65 percent, remains at its high level.

    According to the experts, cattle fatteners and milk producers can also do business better at the moment because their production is only affected to a lesser extent by the rising costs. They benefit from market peaks for their products: the Friesland-Campina dairy, for example, paid its farmers 56.5 euros per 100 kilograms of milk in June. A year ago it was only 38 euros – and that was already the highest value in years.

    However, the dairy industry avoids public jubilation and quietly rejoices. Because of the different structures among the cow farmers, it is not possible to state how much the farmers’ profits are increasing, according to DMK, the largest German dairy.

    Despite higher costs from feed to packaging, the keepers are in a better position. But: “None of us have forgotten how hard the past few years have been for farmers,” says a DMK spokesman.

    The situation is completely different for pig farmers: Their most important resource is, of all things, the much more expensive grain. According to the Thünen experts, your profits should therefore decrease.

    The relevant industry association calculates that the price per kilo of meat for “adequate” farming would have to rise to EUR 2.50 – i.e. by 70 cents. Because of the high costs, the keepers’ profits are currently as low as they were when meat prices were at their lowest point a few years ago.

    So far, the farmers’ lobby has only addressed the farmers’ problems, such as pre-financing fertilizer, but not the opportunities. “It may be that in one to two years the farmers will have significantly greater economic success. But they have to take higher risks to do this,” said Udo Hemmerling, deputy general secretary of the farmers’ association. Farmer President Joachim Ruckwied followed up this week: he claimed that the higher food prices were necessary for farmers to be able to continue at all.

    However, it is becoming apparent that consumers will not simply go along with the price increases. Above all, the politically desired, expensive organic goods are now less in demand. That should reduce the profit prospects for some farmers.

    In any case, chicken farmer Schönecke is currently seeing 30 percent less demand for organic eggs. He already feels reminded of an earlier crisis: “The situation was so bad after the changeover to the euro, when the greed is cool wave came up. That lasted for a few years back then.”