At the same time as inflation and food prices are soaring, Swedish agriculture is experiencing improved profitability. 44 per cent of farmers experience fairly or very good profitability, which is 14 percentage points better than in the previous year. This is shown by the Agricultural Barometer, an annual report on the current state of the industry.
Dairy farmers positive
All four production lines (pigmeat producers, crop growers, beef producers and milk producers) have a better profitability compared to the previous year.
Furthermore, the report shows that 38 percent believe in fairly or very good profitability in a year's time, compared with 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 the authors of the report.
The most positive are dairy farmers. Producers started the year with a historically high milk price – since then the price of milk has increased by around 40 percent further. Despite increased costs, dairy farmers are experiencing "a historically improved profitability," according to the report.
The profitability index of milk producers is at record levels.
Increased food prices
At the same time, we have runaway food prices. Is the profitability of agriculture too high?
- No, it absolutely isn't. Looking 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 believed to have affected investments.
The basis for the Agricultural Report is a Sifo survey conducted by Kantar Public with 1000 farmers, which is carried out on behalf of the consulting firm Ludvig & Co (formerly LRF Konsult), Swedbank and Sparbankernas Riksförbund.