At the same time as inflation and food prices skyrocket, Swedish agriculture is experiencing improved profitability. 44 percent of farmers experience fairly or very good profitability, which is 14 percentage points better than the previous year. This is shown by the Agricultural Barometer, an annual report on the current situation in the industry.
Dairy farmers positive
All four production branches (pork producers, plant growers, beef producers and milk producers) have better profitability compared to the year before.
Furthermore, the report shows that 38 percent believe in fairly or very good profitability in a year’s time compared to 26 percent last year.
– The perceived profitability among farmers has improved, but it is still at a very low level, says Filip Olsson, segment manager at the consulting firm Ludvig & Co, and one of those who produced the report.
The dairy farmers are the most positive. The producers started the year with a historically high milk price – since then the milk price has increased by a further around 40 percent. Despite increased costs, milk producers are experiencing “historically improved profitability”, according to the report.
The milk producers’ profitability index is at record levels.
Increased food prices
At the same time, we have rampant food prices. Is profitability in agriculture too high?
– No, it is absolutely not. If we look ahead, we see that interest rates have increased and that the willingness to invest is at a low level. High prices are required to dare to invest, says Filip Olsson.
However, not everything is gold and green forests, according to the report. Farmers are cutting back on their investments in, among other things, animal stables, buildings and machinery. Uncertainty about costs, higher interest rates and war in our immediate area are some of the factors that are assumed to have affected investments.
The Agricultural Report is based on a Sifo survey conducted by Kantar Public with 1,000 farmers, which is carried out on behalf of the consulting firm Ludvig & Co (formerly LRF Konsult), Swedbank and the National Association of Savings Banks.