Maintusz

Ungarischer Verein der Guts- und Immobilienbesitzer

Dear MAINTUSZ Members,

It is my pleasure to greet you in the forward for this edition of our newsletter.  As with almost all sectors of the economy the business and regulatory environment of in the agricultural sector seems to be much more volatile and changing at a greater pace then at any time in the past.  Fortunately, the sector’s exposure to the COVID pandemic is relatively mild compared to other sectors.  Climate events, expected changes to the European subsidy system during the next 5-7 year period and worldwide commodity prices are having a much greater effect on agriculture.  

Farming commodity prices for arable crops are at close to historic highs especially in Hungarian Forint terms where the HUF as depreciated by about 10% since last year.  The global high level of commodity prices and the week HUF will certainly lead to significant increases in input material cost as well and machinery cost.  An addition effect that I expect is the continued upward trend of land as well as land lease prices in Hungary.

We still do not see the final version of the European subsidy system for the next period.  My expectations are modest declines in real terms with considerable growth in administrative and compliance burden for farmers.  Once we see the final rules everyone will have to adjust their own personal strategy accordingly.  

I sincerely hope that COVID restrictions will dissipate by the second half of this year and after a long hiatus we will be able to meet in person this fall.

With Kind Regards to All

Kristof Szabadhegy