LONDON, ENGLAND – Hungary, a land-locked European Union (EU) member state in central Europe, is self-sufficient in grain for flour milling, with the capacity to export to the rest of the EU or to third countries. As part of the EU, it is preparing to shift the focus of its farm policy to achieve climate and environmental aims as part of the European Green Deal and the Farm to Fork Strategy that forms part of it.
In its Jan. 13 Grain Market Report, the International Grains Council (IGC) put Hungary’s total 2021-22 grains production at 13.9 million tonnes, unchanged from the estimate it produced on Nov. 18, 2021, down from 15.3 million in 2020-21.
Wheat production was put at 5.3 million tonnes, revised up from a previous figure of 5.2 million and up on the 5 million produced the previous year.
Hungary’s maize (corn) output is estimated at 6.4 million tonnes, revised down from the previous estimate for 2021-22 of 6.5 million and down from the 2020-21 crop of 8.3 million tonnes.
Barley output is put at 1.7 million tonnes, an unrevised estimate that is up from 1.4 million the previous year.
The IGC’s latest estimate for Hungary’s 2021-22 rapeseed crop is 700,000 tonnes, revised down from an earlier figure of 900,000, which also was the 2020-21 production total.
As part of the reform of the European Union’s Common Agricultural Policy, Hungary had to produce a national strategic plan for its farm sector, through 2027, by a Dec. 31, 2021, deadline, which the country’s government met.
“We’re modernizing the agriculture and food supply sectors that are the backbone of the rural economy, while preserving the natural values of our created world, allowing for an improved quality of life for people in the countryside, and providing support to small- and medium-sized farms,” Minister of Agriculture István Nagy said in remarks quoted by the news agency MTI.
In recommendations for the plan, the European Commission described Hungary’s agriculture as “an important part of the country’s economy and is an important contributor to the export performance.”
“Agricultural output is varied and balanced between arable crops and the animal sector,” the EC said. “The sector continues to have a fragmented structure, with an important share of small and medium-sized farms.”
The Commission said the total number of Hungarian farms declined steeply between 2005 and 2016, from 715,000 to 430,000 (which represents 4% of EU-27 holdings). A vast majority of them has less than five hectares.
“The average farm size increased from 8 to 12 hectares in the same time period,” the EC said, while the “the agricultural area decreased in the same time period from 5.8 million hectares in 2005 to 5.3 million hectares in 2016.”
“The decline in agricultural area appears both in arable land and in permanent grassland,” the Commission said.
According to the Hungarian Central Statistics Office (HCSO) on Dec 9, 2021, crop production in 2021 decreased by 6.5% over the previous year.
“The quantity of cereals became 10% lower in total,” the HCSO said. “The 23% fall in maize production was offset by growths (of 14% and 4.1%) in the production of barley and wheat, respectively. The production of rapeseed became 20% lower, owing to a decrease in its productive area. The production of sunflower was unchanged and that of protein crops and tobacco went up, so the quantity of industrial crops shrank by 6.5% in total.”
In an April 16, 2021, attaché report on the EU grains sector, the USDA Foreign Agricultural Service said that in Hungary, as well as its neighbors Czechia and Slovakia, rains in October delayed winter grains plantings.
“The above-average temperatures registered in December helped plants strengthen in the early growth stages and at the start of tillering,” the USDA said. “Snow cover since the second half of January protected the crops from frosts in late January and February.
“In Hungary, area planted to corn is expected to expand in response to the steady growth in industrial demand. Hungary is progressively increasing its industrial grain usage (corn and wheat) as processing plants increase their capacities and widen portfolios assisted by government grants.”
In a report on the EU biofuels sector, the USDA estimated Hungary’s fuel ethanol production in 2021 at 640 million liters, putting it third behind France and Germany among European producers.
“In Hungary, processing plants have increased their capacities to focus more on starch and non-fuel ethanol products, mostly for chemical use,” the report said. “An abundance of corn in Central Europe, particularly in Hungary, supports corn-based ethanol production in that region.”
The USDA attaché in Budapest, in an October 2021 report on biotech, described Hungary as “one of the strongest opponents of agricultural biotechnology in the European Union.”
“Maintaining the country’s GE-free status is still a government priority,” the report said. “However, Hungary’s scientific and agricultural organizations, breeding and research institutions are speaking out in support of non-transgenic genome editing.
“In the case of an enabling legislative environment in the EU, the country would be open to adopting innovative biotechnologies. Hungary’s GE-free status is seen as a commercial and marketing advantage since EU member states are the primary destinations for Hungarian planting seed and grain exports. Still, the country has a structural shortage of animal protein feed and must import large quantities of soybean meal, of which about 90% is GE.”
Hungarian Agriculture Minister István Nagy, in a September 2021 meeting of EU ministers, called for incentives for European farmers to produce substitutes for imported soy.
“GM-free crops that meet European standards could contribute to environmental and climate goals,” he said.
According to the European Flour Milling Association, there were 50 mills in Hungary in 2019 with a total capacity of 6,949 tonnes a day (wheat equivalent). The average usage of capacity is 60%. In 2018, the mills processed a total of 1.17 million tonnes of wheat as well as 4,877 tonnes of rye and 55,000 tonnes of durum wheat.
“Hungarian wheat, rye and durum production covers 100% of the Hungarian milling demand,” the association said in its manual on the European flour milling industry. “Hungary is a net grain exporter, but certainly there is also a small imported quantity.”
The association put average flour consumption at 82 kilograms per capita with bread consumption at 45 kg per capita.
GoodMills Magyarország Malomipari Kft, which processes 320,000 tonnes of grain a year in four mills, is Hungary’s biggest miller. It is 99.9% owned by GoodMills Group GmbH, headquartered in Vienna, Austria, which is the largest milling enterprise in Central and Eastern Europe.
Hungarian-owned Szatmári Malom Kft has a capacity of 900 tonnes a day in four mills. Júlia Malom Kft, a Hungarian/German business, operates three mills with a total daily capacity of 570 tonnes. Gyermelyi Zrt. is Hungary’s market-leading pasta producer, with a capacity of over 700,000 tonnes a year.
Other major players in the industry, according to the European Flour Millers Association, are Hajdú Gabona Zrt, Kunsági Malom Kft, GOF Hungary Kft, Mária Malom Kft, Nyírség-Hasso Kft and Celldömölki Malom Kft.
“Most of the Hungarian millers do not take place in cereal producers’ integration,” the association said. “They buy wheat direct from the market.” A few, it said, also own bakery facilities.
The Ministry of Agriculture on March 6 announced new controls on grain exports. Nagy said all wheat, rye, barley, oats, maize, soybeans and sunflowers intended for export must be registered with the National Food Chain Safety Authority, with the government having a purchase priority on them until May 15, 2022.
Nagy said the new controls were deemed necessary after grain market prices and feed prices have risen sharply due to the loss of Ukrainian crops from the market as a result of the war with Russia, coupled with increased demand for foreign purchases of Hungarian grain products due to fear of shortages. He said the main role of the government is to protect Hungarian farmers and families from economic and supply problems.