The Dutch agriculture sector achieved a 5.1% increase in income in 2024 compared to 2023, according to preliminary estimates by Statistics Netherlands (CBS) and Wageningen Economic Research. This rise comes despite a decline in production volumes for both animal and crop-related outputs, as higher output prices and reduced costs contributed to improved profit margins.
Production Declines, But Margins Improve
Overall agricultural output by volume fell by 1.2% in 2024, with arable farming, horticulture, and livestock production all experiencing decreases. The production value dropped slightly, down by 1% to €41 billion, moderated by a 0.2% rise in average output prices.
Meanwhile, the cost of intermediate goods and services, such as fertilizers, feed, and energy, fell by 5%. This reduction in expenses more than offset the decrease in production value, boosting producers’ profitability.
Labour and Income Trends
Labour input in the sector remained stable compared to 2023. However, when adjusted for price changes, which rose by 5.5% in 2024, agricultural income per work year experienced a slight decline of 0.3%.
Key Factors in Cost Reductions
- Fertilizers: Prices dropped by 17.5% in 2024, correlating with falling energy costs.
- Energy: Gas and electricity prices decreased by 20% for the second consecutive year, though they remain high compared to pre-2022 levels.
- Compound Feed: Lower costs for feed also contributed to reduced expenses for farmers.
Animal Production: Mixed Results
Animal-related production decreased by 0.7% in volume but saw a 1.3% increase in average output prices. Total production value for livestock fell by 1%.
Milk Production Declines Amid Higher Prices
Milk production dropped by 2% due to a smaller livestock population. Despite this, raw milk prices rose by 7.7%, leading to a 7.4% increase in production value, totaling nearly €7.4 billion. Milk continues to dominate livestock farming, representing about half of its total production value.
Pig Farming Challenges
Pig prices fell by 10.6% due to an increased supply in the European market, despite a decline in pig numbers within the Netherlands. Elevated prices in recent years provided some relief, but production value in pig farming remained under pressure.
Crop Sector: Stability Amid Challenges
Crop production volumes fell by 1.4%, while average output prices rose by 1.5%. This balance kept the overall production value steady at €20.4 billion.
Cereal Production Impacted by Wet Spring
Cereal production suffered a sharp decline, with production value dropping by 37.5%. A reduced planting area and wet spring conditions contributed to fewer crops being sown, while cereal prices also fell.
Ornamental Horticulture and Fresh Vegetables
- Ornamental Horticulture: Production volume declined by 1.5% for the third consecutive year. However, a 6.9% rise in prices driven by increased demand for cut flowers helped mitigate losses.
- Vegetables: Production increased by 1.8%, but sales prices dropped by 11%, leading to a 9.4% decrease in production value.
Outlook
The Dutch agriculture sector’s ability to maintain profitability in 2024 highlights the resilience of farmers amid fluctuating market conditions. However, persistent challenges, such as elevated energy costs and reduced crop yields, continue to pose risks. As the sector adapts to ongoing pressures, the focus will remain on cost management and market efficiency to sustain growth in the coming years.
