Real income from agriculture - first estimate, 2022
The real factor income per AWU in agriculture expected to increase due to the substantial price increase
Factor income is expected to increase compared with the below average 2021 output due to the substantial price increase in crop and animal output. Production costs are expected to be much higher due to the higher input prices.
Factor income in agriculture higher
Estimating income in agriculture is increasingly challenging due to the complexity of the economic situation and the adaptation of agriculture to it. So far, we have not recorded such high price growth in agriculture, and 2022 is characterized by high price growth both of crops and inputs.
We estimate that in real terms factor income in agriculture will be 15% higher than in 2021. However, the 2021 harvest, with which we compare this year's, was below average. It is estimated that in 2022 the value of agricultural production will be almost a fifth higher than in the previous year, and costs will also be higher by almost a fifth due to higher input prices. At the same time, we assume that the subsidies remained the same as in the previous year. Factor income per annual work unit (AWU) is expected to be higher by 16%, because no significant differences in employment compared to the previous year are expected.
Lower volume of agricultural production and substantially higher prices
The value of the agricultural output in 2022 is expected to amount to EUR 1,657 million. The value increase is the consequence of slightly lower volume (by 1%) and much higher prices (by 19%).
Larger crop output value due to significantly higher prices
The value of crop production is expected to be 15% higher than in 2021, with production expected to be 2% lower and prices to be 17% higher. Lower production as a result of worse weather conditions (mainly drought) is expected in almost all areas of plant production. The only exceptions are fruit and olives/olive oil, where higher production is expected compared to the very poor 2021 harvest. Despite lower prices, the value of fruit is expected to more than double due to production increasing by two and a half times. The value of olive oil is expected to double due to a larger harvest.
The value of cereals is expected to be more than a third higher due to an almost 50% price increase, despite production that was almost a tenth lower. Almost a third higher value can be expected in the production of potatoes due to a 50% price increase despite a worse harvest. The value of industrial plants was lower by more than a tenth, despite higher prices (by 4%) due to lower production (by 15%). The value of vegetable production is expected to be more than a tenth lower, due to an estimated 20% drop in production, despite expected higher prices. A slightly lower value is also expected for wine, where price growth is expected, but production is also expected to decrease by the same percentage. The value of fodder crops is expected to be lower due to the production decrease by a quarter, despite prices being a quarter higher.
The animal output increase due to the price increase
It is estimated that the value of animal output will increase by almost a quarter. Animal output prices are expected to increase by almost a quarter, while the volume is expected to be lower by 1%.
At the aggregate level of animals, no major change in volume is expected, but due to prices increasing by a fifth, a fifth higher value of livestock production is expected. A third higher value is expected for cattle breeding due to significantly higher prices (by a third). A higher breeding value is also expected for pigs. Almost a tenth higher value is expected in poultry due to the price increase. A tenth higher value is expected for the rearing of sheep and goats due to volume and price increase.
The value of animal products is expected to be higher by more than a quarter, despite a volume decrease. The biggest impact on the value of animal products comes from milk, where lower production and a third higher prices are expected. The production value of eggs and other animal products should also be higher than in the previous year.
Higher production costs are expected due to significantly higher prices of inputs
The value of intermediate consumption is expected to increase by a fifth in real terms, mostly due to higher prices. A significant increase in the prices of all mportant inputs is expected. Fertilizer costs are expected to increase the most due to the doubling of prices. Feed costs are expected to increase by almost a fifth due to higher prices, and energy costs are also expected to increase by a fifth. An increase is also expected in the remaining costs, which are expected to rise between 1% and 5%.
No substantial change in employment
Employment is expected to remain at the previous year’s level.
Annual changes of the main agregates in agriculture, Slovenia, 2021
1) The deflator is the implicit price index of GDP at market prices. According to Eurostat data, its value for the year 2022 is 106.578289590111.