Substantial income differences across sectors in agriculture and horticulture, also in 2024

This is according to Wageningen Economic Research's annual income forecast, led by agricultural business economist Harold van der Meulen:

• ‘Strong income growth was seen among cut flower growers in 2024 due to higher flower prices, attributable mainly to fewer imports from abroad and lower net energy costs.
• For pig farmers, 2024 became a standstill year after a very good 2023. Incomes fall sharply as European competition increases. The lower feed price does not compensate for this.
• Incomes in poultry farming are on average at a high level. Globally, egg supply is tight as many countries struggle with bird flu.
• Increased milk prices due to increased demand for dairy products are boosting dairy farmers' incomes, despite an increase in costs.
• Also notable is the sharp drop in income of dairy goat farmers due to a decreased milk price because of oversupply.
• Arable farmers record lower average prices for the 2024 crop on higher kg yields of most crops. Due to increased costs, income falls to slightly above the 2019-2023 average.’

Unpaid annual work unit

Wageningen Economic Research calculates agricultural income per unpaid annual work unit (‘AWU’). In most sectors, agricultural entrepreneurs and their family members often perform most of the labour themselves, but usually do not receive a salary. A person working 2,000 hours or more in a year is counted as one AWU. Those who work less count for less than one AWU. Wageningen Economic Research divides farm income in this situation by the number of unpaid AWU. In this way, the incomes of different farm types are more comparable. In fact, the average number of unpaid AWU per farm type varies considerably.

Overview by sector

Dairy farm income rises due to higher milk price

The average farm income of dairy farmers is estimated at €74,000 per unpaid AWU in 2024. This is €9,000 higher than in 2023 and €11,000 higher than the 2019-2023 average (see table 1). The lower supply of milk with increased demand for dairy products is driving up dairy prices. The average milk price received for conventional (non-organic) milk is expected to increase by 8.5% in 2024. Prices of calves and slaughter cows sold continued to increase in 2024. The realised yield increase is sufficient to compensate for the increased costs of buildings, machinery and implements, manure disposal, interest and animal health in particular.

The average income of the specialised organic dairy farm is estimated at €33,000 per unpaid AWU in 2024. This is a decrease of €16,000 compared to 2023 and €14,000 lower than the 2019-2023 average. The average organic milk price is expected to increase by 1%. The slightly increased milk income is not sufficient to compensate for the increased costs of interest, buildings, machinery and equipment.

Pig farmers' incomes down due to lower prices

Pig farming income dropped sharply after peaking in 2023. The estimated farm income of around €210,000 per unpaid AWU on average is €195,000 lower than in 2023, but is still above the average of €167,000 for 2019-2023. Prices of piglets and fattening pigs are down in 2024 compared to 2023, by 12% and 9% respectively, due to increased production in the European pig industry. The decline in yields of around 17% was insufficiently offset by lower pig feed prices. Feed prices fell mainly because trade flows returned to normal after being disrupted by the Russian invasion of Ukraine. In addition, manure disposal costs increased.

Significantly lower incomes are projected for sow and closed pig farms in 2024. Sow farm incomes fall by €315,000 to €230,000 per unpaid AWU, mainly due to the lower piglet price and increased manure disposal costs. The income decline on closed pig farms, at €274,000 per unpaid AWU to €232,000, although less than on sow farms, is also solid after a very favourable year. Income also falls on fattening pig farms by an average of about €50,000 to €184,000 per unpaid AWU. This drop in income is less pronounced, as the lower returns from fattening pigs are partly offset by cheaper piglets and lower feed costs. Despite the sometimes sharp drop in income, incomes for all three types are still above the average of the past five years.

Income on laying hen farms down due to lower egg yields, despite lower feed costs

For 2024, the average income for laying hen farmers is estimated to be around €45,000 lower than in 2023, at around €230,000 per unpaid AWU. This is mainly due to lower yields, even though feed costs fell. The average egg price (including contracts) is about 5% lower in 2024 compared to 2023, but there are large differences between different segments (farming systems) and between market and contract prices. Globally, egg supply is tight as many countries are struggling with bird flu. As a result, egg prices remain relatively high. Feed prices fell by 5-10% year-on-year due to lower prices for feed raw materials. Feed costs account for about 60% of total farm costs. The current estimated income is about €115,000 above the 2019-2023 multi-year average.

Broiler farm income up due to lower feed costs

For 2024, the income of the average broiler farm is estimated to be about €35,000 higher at about €275,000 per unpaid AWU, thanks to a stronger decrease in costs than in revenues. Prices of slow-growing chicks (Beter Leven label 1 star, about 50% of production) have remained about the same and prices of regularly reared chicks have fallen by 2% on average. Total yields at farm level have fallen more, as the poultry flock is decreasing due to the higher share of slow-growing chicks. The price of broiler pellets fell by about 10% year-on-year in 2024. For chicks, feed costs account for over 60% of total farm costs. The current estimated income is over €100,000 above the multi-year average for 2019-2023.

Income of dairy goat farmers down due to lower milk price

Farm income on dairy goat farms is expected to average €50,000 per unpaid AWU in 2024. This is €51,000 lower than in 2023 and the average income in the previous 5 years (2019-2023). The 6% lower milk price due to oversupply is responsible for this. Cost increases of buildings and machinery, manure disposal, paid labour and interest, among others, are largely offset by lower feed costs.

Holders of white veal calves on contract see income rise

Farm income on veal calf farms (white veal calves on contract) is estimated to be €10,000 higher for 2024 at an average of €68,000 per unpaid AWU. This is €20,000 higher than the multi-year average for 2019-2023. The contract fee received per average present veal calf in 2024 increases by 11%, partly due to decline in veal calf farming. This is more than enough to absorb the increase in costs of buildings and machinery, manure disposal and interest.

Table 1 Average farm income (x €1,000) on farms, 2019-2024 (r)

Income decline for arable farmers due to lower yields and increased costs

The income of arable farmers is declining due to lower average prices for higher kg yields of (most) crops and increased costs. Estimated income for crop year 2024 comes to around €90,000 per unpaid AWU. This is a decrease of €23,000 compared to 2023, but about €6,000 higher than the multi-year average for 2019-2023.

The price of onions is lower than in the previous two years. Acreage has increased by 3,000 ha to 33,000 ha. The kg yield per ha has also increased slightly: this ensures ample supply. For ware potatoes for crop year 2024, a 5% lower price is forecast. Potato processing companies have enough potatoes on contract and foreign countries also have a large supply due to area expansion and a good harvest. For seed potatoes, kg yields are good and prices are rising due to increased demand, after prices were already high last year. While high prices were paid for sugar beet in the past two years, prices have fallen in 2024 on the world market. Cosun Beet Company is counting on a significantly lower price than last year for growers. Grain prices for crop year 2024 have stabilised and returned to pre-war Ukraine price levels. Due to wet weather conditions, kg yields of cereals were very disappointing in 2024. In addition, farm input costs increased across the board, excluding energy and fertilisers. This is especially true for plant protection products, buildings and machinery and finance costs.

Farm income per unpaid AWU on starch potato farms decreases to €78,000: that is €25,000 less than last year and equal to the 2019-2023 multi-year average. Costs for crop year 2024 are projected slightly higher and yields lower. Prices and kg yields for starch potatoes are good and look set to be higher than last year. Besides starch potatoes, these farms grow mainly sugar beet and cereals.

Higher incomes in greenhouse horticulture mainly thanks to cut flower farms

Farm income in 2024 is estimated at €307,000 per unpaid AWU for an average greenhouse farm. This is €20,000 higher than in 2023 and almost €70,000 above the average income for 2019-2023. The more than 4% increase in income was enough to offset the 4% increase in paid expenses and depreciation. Both within and between the three distinct subtypes (see below), there is a wide spread in income trends.

How the lower energy prices in 2024 translate into revenues and costs varies from farm to farm and also depends on the farm design:

• For example, is there (LED) lighting or a combined heat and power (CHP) plant?
• Does the farm use geothermal heat or have solar panels?
• Is there grid congestion at the site?
• Do they have battery storage facilities?
• What contracts are there about supplying energy?
• What strategies are there for energy purchase and sale in conjunction with the cultivation strategy?

Higher temperatures, energy savings and optimisations of existing equipment, on the one hand, and a more regular cultivation plan (earlier planting, more lighting, more intensive cultivation) from before the energy crisis, on the other, caused a slight increase in gas consumption. Farms are increasingly flexible in meeting their energy needs and therefore this estimate is also subject to uncertainty. Individual choices strongly influence the outcomes. Ultimately, for the grower it is all about the difference between energy costs and yields. People are constantly looking for the optimal return between yields from growing products and energy options. See also Energy monitor of Dutch greenhouse horticulture 2023 (Smit, 2024).

The average farm income per unpaid AWU of greenhouse vegetable farms is estimated at around €320,000 in 2024, about €15,000 higher than in 2023, due to costs decreasing more than revenues. The slight decrease in yields is mainly due to less revenue from energy sales, due to a lower price for returned electricity. Revenue from crops increased by 1% on average. Mainly due to lower energy costs, total costs were lower. The level of income strongly depends on the type of product, how marketing is organised on the farm and the positions on the energy market.

As for crops, in tomato cultivation (the most important crop in terms of area measured in Dutch greenhouse vegetable cultivation), average prices are lower than last year due to increased (foreign) supply. The price of peppers fell slightly on average with an increase in acreage and competition in spring from Spain. Cucumber growers have had a good year due to significantly higher prices, on slightly lower production due to dark weather in spring. The 2024 cucumber price is well above the five-year average.

The average farm income per unpaid AWU of cut flower farms is estimated at around €370,000 in 2024: an increase of €140,000 compared to 2023. Income from flower sales increased sharply due to mostly higher prices at lower volumes, benefiting from well-run international sales markets and less supply from abroad. Companies with cogeneration plants (combined heat and power plants, which produce electricity from gas in addition to heat and CO2) also achieved revenues from energy sales, although these were lower than last year due to the lower selling price of generated electricity. As the gas price also fell, it remained attractive to deploy the CHP. Total costs are estimated around 7% higher. The decrease in energy costs was offset by an increase mainly in crop protection and labour costs due to increased collective wages.

The average farm income per unpaid AWU of pot and bedding plant farms is estimated at around €213,000 per unpaid AWU in 2023, a decrease of around €115,000 from 2023. Income has fluctuated widely in recent years. Since 2020, there have been peaks and troughs each time. The income estimated for 2024 is still as much as €15,000 above the average income of the past five years. Costs rose by over 9% on average due to an increase in average farm size and across-the-board increases in input costs, with the exception of energy costs (-10%). Total revenues increased by 3% on average. In particular, revenues from bedding plants increased due to recovery in numbers sold. For houseplants, the increase in revenue was limited. This was offset by a decline in energy sales revenues. Nevertheless, these yields remained much higher than in 2020 and before.

Diverse pattern of income in open-ground horticulture sectors

In flower bulb production, average farm income per unpaid AWU is estimated at around €200,000 in 2024, an increase of over €50,000 compared to 2023. Yields have increased by 5% on average in 2024 due to a combination of a better price for flower bulbs at a lower volume. The high rainfall in spring caused a moderate growing season and scarcity of supply. Total expenses and depreciation paid were similar to last year.

Average farm income in arboriculture is estimated at around €132,000 per unpaid AWU in 2024. This is a decrease of €73,000 compared to 2023, mainly due to an increase in costs of 7% on average. The increase in costs is mainly in imputed costs (including planting materials), one of the largest cost items on the farm combined with higher labour costs. Income declines by 3% on average due to fewer products sold and lagging selling prices. This puts income at the 2019-2023 average.

In fruit cultivation, average income for crop year 2024 is estimated at about €31,000 per unpaid AWU. This is about €4,000 lower than in crop year 2023. The decrease is caused by a stronger increase in costs than in yields. Partly due to lower Dutch and European apple and pear production than in previous years, the expected sales prices for hard fruit are good. The higher yields are not enough to compensate for the increased costs of paid labour in particular.

On outdoor vegetable farms, average farm income per unpaid AWU is estimated at around €127,000 in 2024, up €13,000 from 2023. The higher income is due to higher prices at a lower production volume of some vegetables due to wet weather conditions. As a result, income rose more than costs, which increased across the board, with the exception of energy. Thus, income rises to the highest level of this century.