Farm profitability under the microscope

Following the work of the Agri-Food Taskforce, the Federal Economy Department is publishing new indicators to track the evolution of profitability and production costs for cattle and pig farmers. A step towards greater transparency within the food chain. Indicators covering other farming activities will follow later this year. The successive crises, the Covid-19 pandemic, post-Covid inflation and the conflict in Ukraine, have highlighted the vulnerabilities of the agricultural sector in Belgium and Europe. In 2024, a wave of farmer protests underlined the major challenges facing farmers. To address these concerns, an Agri-Food Taskforce was set up at federal level. As part of this Taskforce, a “Transparency” working group was launched, bringing together experts and representatives from the various links in the agricultural supply chains. The aim of this working group is to develop indicators that objectify the evolution of income and agricultural production costs. These tools are meant to help the various stakeholders in their commercial negotiations and in applying the new law on unfair trading practices (UTP law), which bans buying at a price below production costs (unless there is a clear and unambiguous agreement). The Federal Economy Department has just published the first indicators covering beef and pork activities. In addition to a structural indicator measuring long-term profitability based on data from regional accounting networks, a monthly indicator is also being developed to estimate the impact of recent changes in various production costs on the profitability of the activity. Low profitability for beef, unstable recovery for pork The published results reveal a low structural profitability for both activities. For cattle fattening, the situation has been difficult for several years: income barely covers production costs, and does not allow for the remuneration of family labour. As for pork, an improvement in profitability was observed in 2023 after two difficult years. This trend continued in 2024, although profitability declined slightly in the last months of the year following a drop in income. Currently, the income of the three types of pig farms covers all production costs, including family labour. However, it is important to note that these results reflect an average, and may therefore mask significant differences between farms within the same activity. In the coming months, the working group will look at developing indicators for other farming activities, depending on the priorities of the sectors. David Clarinval, Minister for Agriculture: “We announced it during the farmer protests, and we have delivered! The introduction of agricultural indicators is now a reality, providing the structural and lasting answers the sector has long been waiting for. The first results remind us, if any reminder were needed, that farmers' situation is fragile and that it is crucial to support the entire sector. Ensuring clear communication of production costs is an essential step towards greater fairness for farmers. They must be able to rely on fair prices for their work. This approach is fundamental to guaranteeing the profitability and sustainability of farms in Belgium. Based on these indicators, farmers will be better equipped to negotiate fair prices for their work.”  

https://economie.fgov.be/fr/themes/analyses-et-etudes/rentabilite-agricole