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Slovak Agriculture Awaits 1.1 Percent Drop in Production, Sales Should Increase Slightly

5 January 2017, Bratislava

Performance of Slovak agriculture awaits in 2017 a decline by an average of 1.1 percent, subsequently agricultural production should stagnate next year. Slovak farmers sales should increase by 0.4 percent, large differences are in the issue of production depending on its orientation. In this respect, companies focusing on plant production are more pessimistic. Agricultural companies have currently made contracts for 8.4 months. This results from the Quarterly Analysis of Slovak Agriculture Q4/2016 processed by the analyst firm CEEC Research in cooperation with the O.M.C. Invest.

 The absolute majority (55 percent) of Slovak agricultural companies directors predicts a drop in performance of Slovak agriculture in 2017 by an average of 1.1 percent. Thus their forecast of the Quarterly analysis of Slovak agriculture Q3/2016, which expected the same development, was confirmed. However, companies focusing on plant production are currently more pessimistic, announcing production decline by 1.7 percent. On the contrary, enterprises oriented to livestock production are expecting sector stagnation (0.0 percent).

In 2018, Slovak agricultural production should oscillate around zero and minimal decrease by 0.1 percent is expected. Directors of agricultural companies across the whole sector have agreed on that.

"In Slovakia, fairly massive divestment of agricultural holdings is nowadays carried out and the ending generation of managers of agricultural cooperatives is given into the hands of foreign investors or domestic financial groups. One can assume that the owners' pressure on corporate profitability will continue to reduce production of cow's milk and number of dairy cattle. Number of dairy sheep and beef breeds might grow." describes Vladimír Chovan, Director General, AGROPARTNER, s. r. o.

"I expect that the volume of livestock production in the Slovak Republic, respectively production from it, will be reduced, at best, will stagnate. Output of plant production will probably also not raise because a great part of it must be exported and at current prices on the world market from which 40 - 50 €/t must be subtracted, it will not be profitable. In terms of the economy, so-called "Doing nothing, only receiving subsidies at the lowest cost per unit area" will expand." adds Rastislav Slocík, Chairman of the Board, Agrospol Cooperative.

Slovak farmers sales will grow in 2017 by an average of 0.4 percent, while this increase is expected by almost two-thirds (63 percent) of the directors of agricultural companies. Large differences arise from orientation of production. While the companies focusing on livestock production predict revenue growth of 2.2 percent, companies dealing with plant production, on the contrary, expect a fall of 0.6 percent.

The situation will improve in the following year, when the average sales should rise by 1.2 percent. More optimistic firms are again companies focusing on livestock production, they are expecting sales increase of 2.2 percent. Companies focused on plant production are more cautious and predict revenue growth of 0.7 percent.

"If the state agricultural policy does not change, farmers will not do well. Or all the possibilities for agriculture will not be used and its social and landscape tasks for its success will fail to fullfill." says  Mário Červenka, CEO, O.M.C. Invest.

At the time of research, in November and December 2016, agricultural companies made contracts at an average of 8.3 months in advance. A fifth (21 percent) of them had more work than last year in that period, two thirds (66 percent) of companies confirmed in the annual comparison the same number of contracts. Companies focusing on plant production were doing better, they entered into contracts for 8.9 months ahead. Companies and cooperatives focused on livestock production showed contracted orders for the next 7.3 months.

"Contracts for next season are just getting started. Considering this year's experience with higher harvest, purchasers are very cautious. We deal with a "new crop" contract usually 6-8 months before the harvest." says  Zuzana Tehelová, Director, Agricultural Cooperative of Vrbová nad Váhom.

The Quarterly Analysis of Slovak Agriculture Q4/2016 will be soon published at

www.ceec.eu

Media contact:


Jiří Vacek
CEO

CEEC Research s.r.o.
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel.: +420 774 325 111

CEEC Research is the leading analyst and research company focusing on the development of selected segments of economy in the countries of Central and Eastern Europe. Our current studies are used by over 17.000 companies around the world. CEEC Research was established in 2005 as the analyst organisation specialised in research processing and building sector analysis, after that the analytic coverage has extended to other selected sectors of economy, including the engineering.

CEEC Research in addition to regular free analysis also organizes meetings of selected sectors leaders, involving CEOs of major companies, chairmen of key companies, presidents of key unions, guilds and chambers as well as ministers and Heads of State of selected countries.