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Europe's farmers eye greater investment

DLG Trendmonitor points to a surge in business optimism, the highest since Spring 2008

 

Frankfurt, Germany, 20 April, 2011 - -Investments in farms are high on the agenda for Europe's farmers this season, as revealed by the latest results of the DLG Trendmonitor Europe. The latest Spring 2011 release of this twice-yearly survey, which tracks sentiments among agriculture decision-makers, points to a steady upturn in expectations for the agri-economy in Europe compared to the last survey in Autumn 2010.

"The mood among farmers is optimistic” says Dr. Achim Schaffner, DLG’s Chief Economist. Optimism in the farming business is at its peak since Spring 2008. German farmers once again top the list, with those in the UK coming second, the best British performance since the survey began in 2003. A total of 3,000 farmers in Germany, France, Great Britain, Poland, the Czech Republic and Hungary were interviewed for the survey.

Behind this positive business outlook is an increase in consumer demand on agricultural products. Current dynamics in the world economy coupled with markets that are characterized by relatively scarce grain and oilseeds supplies have seen farmers expecting higher prices. Beyond that, interest rates are still favorable at the moment but tend to increase in the upcoming month. Farmers planning to capitalize on these favorable business conditions to modernize their production and increase efficiency. Investment intentions among German farmers have risen by six percent, compared with Autumn 2010, to 55 per cent in the current survey. French farmers recorded an eight percent increase over the previous survey.

Farmers in Central and Eastern Europe also showed higher levels of investment intentions. About 57 percent of Polish farmers surveyed had investment plans, representing a nine percent increase over the previous Autumn survey. In the Czech Republic this was about 68 percent of farmers (45 percent in fall 2010) and 54 percent in Hungary (34 percent in fall 2010).
Despite the increased optimism in the UK, British famers registered three percent lower investment intentions compared to autumn 2010, which is likely due to exchange rate effects of the pound and euro..

Shifts in investment portfolio
Among the various agri-business sub-sectors, investment intentions vary drastically. For instance, farmers in Germany are looking to expand investments by about three percent on average in animal husbandry, while for bioenergy, this is limited to two percent. Investments to expand in arable farming remain strong – 15 percent in Hungary, 15 percent in the Czech Republic, 9 percent in the United Kingdom and 6 percent in France. 
Notably, Polish farmers are planning to focus up to 81 percent of their investments in arable farming. At the same time, the dynamics of the cereals and oilseeds market are prompting famers in Central and Eastern Europe to modernize production, thanks to favorable investment conditions – namely, price structure and level of interest rates.
Conducted by the DLG (the German Agricultural Society), together with Europe's leading agricultural market research institute, the Kleffmann Group (Lüdinghausen / Westphalia), DLG’s Trendmonitor Europe offers a twice-yearly assessment of the agribusiness outlook in Europe. The survey results, published every Spring and Autumn (September) provide decision-makers with critical information on the current and short-term business climate as well as key trends shaping the future of Europe’s farming sector.
 
Media contact
Malene Conlong
Tel: +4969-24788237
Email: M.Conlong@dlg.org
 

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Friedrich W. Rach

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Malene Conlong

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International media and communications manager