Agri-food markets are slowly stabilising

The agri-food outlook of the Natural Resources Institute Finland (Luke) shows that the tightening financial situation in households reduced the consumption of organic and plant-based products. The situation in households will improve slightly as food prices are expected to decrease towards the end of 2024.

Consumers sought comfort food and reduced their purchases of organic products

The decreased purchasing power of households and lower demand have challenged the entire food chain in Finland and other parts of the EU. Two significant trends can be seen in food consumption: increasing sales of comfort food such as crisps, sweets, ice cream, etc. and a significant drop in sales of plant protein products. The changes in consumers’ purchasing behaviour can also be seen as a decrease in sales of organic products.

“Food prices will start to decrease in 2024. Consumer prices for foodstuffs and non-alcoholic beverages are expected to fall by 2-3 per cent this year,” says Hanna Karikallio, Research Manager and Senior Scientist at Luke.

Food imports and exports decreasing

The value of Finland’s exports of all animal- and plant-based products started to decrease in 2023 following the previous year’s significant increase. The export value was EUR 2,159 million, down by more than six per cent from the previous year. In 2023, the value of animal- and plant-based products imported into Finland was EUR 6,846 million, roughly five per cent less than in the year before. Finnish food production needs to increasingly compete with imports, including in product groups with more domestic production such as meat, dairy and fish products.

Cereal markets stabilised and cereal prices decreased

Cereal markets have stabilised after the rapid changes in 2021–2023. While cereal prices have decreased, they are still 25–50 per cent higher than the lowest level preceding the two-year tumult. In 2024, Finland’s cereal harvest is expected to by smaller than average at less than 3.2 billion kilos based on cultivation area forecasts and long-term average yields.

In 2023, the total organic cultivation area decreased for the first time during the 15-year monitoring period. The use of organic cereals for food also fell to 41 million kilos from the previous year’s 50 million kilos. Organic cereal production accounts for five per cent of Finland’s total cereal harvest. Oats cover almost 70 per cent of organic cereals.

Oilseed crop production growing, potato production at a record low

In 2024, oilseed crop production will increase significantly from the previous year, while pea and broad bean production will remain at the same level or decrease slightly. Demand for protein crops will remain stable, and their use for food and feed will only increase further in the future.

Potato production has decreased significantly, with the production volume in 2023 being among the smallest in a hundred years. When potato was an important part of food supply in Finland recovering from the wars, its production was nearly four times that of last year. During the previous ten years, the number of potato farms has almost halved. In 2023, fewer than 4,400 farms produced potatoes.

Meat production volumes increasing

Higher costs and the resulting increases in producer and consumer prices have caused changes in the Finnish meat markets. However, the estimates of a significant drop in meat consumption in 2023 did not materialise. The structure of consumption shifted towards more affordable product groups, and imports increased especially in poultry meat. Poultry meat consumption was higher than pork consumption.

“In 2024, total meat consumption is expected to remain close to the previous year’s level. Total meat production will increase, driven by the return of chicken meat production to the 2022 level,” says Csaba Jansik, Senior Scientist at Luke.

Milk production volume decreasing, egg production increasing

In the dairy industry, 2023 was a fairly good year, even though profitability was not at the 2022 level. In 2018–2023, production decreased by an average of 1.2 per cent per year. Due to the investment slump, the milk production volume will also decrease in 2024.

Last year, egg production decreased by 1.2 per cent from the previous year, even though total egg consumption increased. The self-sufficiency rate in production still remains high at roughly 117 per cent. In 2024, both the production and consumption of eggs are expected to increase slightly.

Last year, the consumption of eggs in shells and egg products was 11.7 kilos per capita. This equals 199 eggs per capita per year.

A positive trend seen occasionally in financial development in agriculture

In 2023, the number of farms in Finland was down to slightly more than 42,000, while the corresponding figure in 2010 was almost 60,000. The number of farms decreased at a rate of roughly 2.6 per cent a year in 2010–2023, and even more quickly regarding livestock farms. The number of farms specialising in milk production decreased at an annual rate of seven per cent and that of pork production farms by more than ten per cent a year.

The average profitability of agricultural enterprises increased, being higher in 2022 than during any other preceding year in the 2000s. Profitability was especially increased by higher producer prices. In 2023, profitability is estimated to have decreased as a result of cost pressures and lower producer prices, returning to the 2021 level, but better than in more than 15 years before.