In Hungary both the meat industry and arable farming face serious challenges
Corn and wheat producers still reeling from the impact of the drought struggling to compete with cheaper import, the meat industry staring down the barrel of a crisis, new models suggesting climate change is dramatically transforming Hungary - Our weekly briefing on agriculture, food and nature news in Hungary.
Wheat and corn prices dropping in Hungary due to Ukrainian import.
Both Portfolio.hu and Hungary Around the Clock report that corn and wheat prices in Hungary have started decreasing due to the influx of imported Ukrainian corn and wheat.
The price of corn in the past period has been between €300 and €320 per ton, which, according to Portfolio.hu, has been more or less in line with global prices. Imported corn from Ukraine however, goes for around €190 to €200 per ton in Hungary currently, depressing corn prices all over the market. This also forced the price of Hungarian corn down to under €250 per ton.
Hungary normally produces between 6.5 and 9.3 million tons of corn annually, out of which, 35-45% is exported and 20-25% goes into industrial production. In 2022, due to the year’s catastrophic drought, Hungarian corn production came to a total of around 3.2 million tons (the official figures are not available yet), which does not even cover the domestic demand of corn for human consumption of around 4 million tons.
The price of wheat similarly dropped due to the import, from an average of €354 to €278 due to the import.
A domestic alliance of farmers’ collectives, MOSZ, finds the influx of Ukrainian grain ‘a problem,’ adding that due to the import: ‘after animal husbandry, arable crop cultivation will now also go into decline in Hungary.’
MOSZ further commented that the problem lies in the fact that Ukrainian cereals are not exported further, but bought up en masse by the bio-ethanol industry, and the manufacturers of high-fructose corn syrup, animal feed and the milling industry.
The alliance also stated that the issue with the prices comes in a time when the country has lost a lot of ground on export markets due to the government’s ‘unreasonably introduced’ grain export measures in 2022.
Moreover, the alliance added that due to the drought, Hungarian farmers have suffered damages worth €2.533 billion to €3.039 billion and that ‘due to the flawed damage compensation system, only a fraction of this is acknowledged as legit drought damage because of the unrealistically set comparison prices.’ Portfolio.hu adds that only €79.7 million is available for damage compensation.
The shape of things to come: Climate change will drastically transform Hungary in the future
Scientists at the University of Szeged have recently published an article in the Hungarian Geographical Bulletin on the effects of climate change in Hungary in the coming decades. The team, led by lead researcher Tamás Gál, have analyzed thirteen regional climate models to predict the effects of climate change in Hungary.
OTP Agrár reports that Tamás Gál emphasized that anthropogenic climate change, which is caused by the emission of greenhouse gases, contributes to these changing patterns. This includes everything that relies on the burning of fossil fuels for energy, including communal heating, electricity consumption, traffic, logistics and agriculture.
The study has concluded that by the second half of the 21st century, the annual number of tropical nights (a climate term in Europe that refers to night temperatures that do not drop under 20°C) will have increased three to four times the current average, and the number of very hot days (with temperatures over 30°C) will also double.
Due to this, 20-40% less energy will go into heating but the energy usage of domestic cooling will increase by 60%, and the two values will be comparable in the South Great Plains.
Rain patterns will also change throughout the century. The number of days with heavy rains will increase by 20-40% while the number of drought periods will also increase by 20%.
The EU’s emission-reducing efforts are important in avoiding the most pessimist scenarios from the projected models, however, the researchers emphasize that individual action is also important, most notably, energy efficient developments in domestic residential buildings, the usage of energy efficient devices, and climate awareness on the part of citizens, e.g. using bicycles and public transport.
New Avian influenza appearances confirmed
The National Food Chain Safety Office (NÉBIH) has confirmed the presence of highly pathogenic Avian influenza at a duck farm in Békés county, in South Hungary.
The farm held two thousand heads of mulard ducks and the H5N1 strain of Avian influenza was found in samples taken from livestock intended for slaughter.
NÉBIH reports that routine veterinary procedures have been followed and protection as well as observation areas have been set up. In the neighboring counties of Bács-Kiskun and Csongrád-Csanád, previously established restrictions are still in place.
A high level of mortality has also been observed among captive birds at an animal shelter in Budapest, in which case NÉBIH also identified the presence of the H5N1 strain of Avian influenza.
Hungary’s meat industry will be tested in 2023
Agrárszektor.hu reports that the current challenges will make 2023 testing for the meat industry in Hungary. As the portal recounts, the industry faced serious challenges a decade ago. In the beginning of the 2010s, the ongoing effects of the 2009 global financial crisis, wage pressure, high animal feed prices and increasing illegality due to high value added taxes brought down many meat companies in the country.
In the past years, development subsidies seemed to pull the industry out of the decade-long trough, however, persisting structural issues as well as resurfacing market challenges will collectively make the meat industry’s troubles come to a head in 2023.
An ongoing structural issue in the country is that slaughtering is a narrow bottleneck in the production chain. Although there are modern, well-equipped slaughterhouses in Hungary, their production volume is way too low. Due to this, many meat companies who find costly and inefficient in-house solutions for slaughtering, are already at a competition disadvantage early in the value chain of their product.
The current economic crisis has also brought back the issues of high input costs, including energy and animal feed.
Producers in the meat industry have enjoyed prosperous years in the past period due to increasing demand, and an increase in consumers’ disposable income, which in turn led to an increase in the demand for quality local products, and unique specialties. These were profitable for smaller producers even at a small scale and efficiency. However, the drastic decrease in consumers’ real income has led to a drop in the demand for local products and specialties.