Czech Farmers Selling Wheat for 45% Lower Prices Than Last Year

According to the Czech Agricultural Union spokesperson Vladimir Picha, wheat food prices are about 45% lower than last July. He reported that the price for a ton is 4,500 crowns. In July last year, the average price per ton was 8,268 crowns, according to the Czech Statistical Office (CSU).

Picha mentioned that the current conditions offered by traders and processors to farmers are very disadvantageous. He said a lower yield in EU countries, which is expected to be 10% lower than last year, could stabilize prices.

Last year, the average wheat price exceeded 8,000 crowns in May, and the average price for the whole year was 7,605. The price has not been at the level of under 5,000 crowns per ton since 2021.

According to Picha, farmers who can store their harvest are not trading with their grain and are waiting for further development.

“Unfortunately, the current situation is very unclear, and the termination of the grain agreement only compounds this uncertainty,” he added.

Russia suspended its participation in the agreement on Monday, which has allowed Ukrainian agricultural products to be exported from ports on the Black Sea despite continuing fighting in Ukraine since the summer of last year.

This led to an increase in wheat prices on world exchanges on Monday. On the commodity exchange in Chicago, prices rose by about four percent immediately after Russia announced its withdrawal from the agreement.

However, this growth was erased, losing more than one percent at $6.54 per bushel (27,2 kg). President of the Agrarian Chamber of the Czech Republic, Jan Doležal, said that the implementation prices of Czech farmers are significantly below the prices on the exchange.

The Agricultural Union previously warned that Czech companies may have difficulty storing part of this year’s crop. They still have about two million tons of grain from last year’s harvest in storage. The union explained that this was mainly due to grain imports from Ukraine to the EU, which halted exports.

A large part of production is exported from the Czech Republic every year. If this year’s yield is about seven million tons, according to CSU’s first estimate, storage capacity, which is about eight million tons, may not be enough.

A similar scenario is not feared by the Minister of Agriculture Marek Výborný (KDU-ČSL), who said last week. According to him, farmers also held part of the harvest in storage and expected prices to rise.

According to economist Tomáš Maier from the Faculty of Business and Economics at the Czech University of Life Sciences, farmers themselves caused this situation, as they could sell their harvest last year for very high prices.

The Czech Statistical Office estimated that this year’s harvest of basic cereals could be about 8% lower than last year. Statisticians will refine harvest data several times, and further developments will depend mainly on the weather.

Impact of Lower Wheat Prices on Czech Farmers

The decline in wheat prices has significant consequences for Czech farmers. They are forced to sell their wheat at prices much lower than what they were getting last year. This puts a significant financial burden on them, and they may struggle to make ends meet.

The lower prices are due to various factors, including a lower yield in EU countries and the suspension of Russia’s participation in the grain agreement. These factors have created an uncertain and unpredictable market, making it difficult for farmers to plan and budget for the future.

The current situation has also highlighted the need for better risk management strategies for farmers. Many farmers do not have the resources to store their harvest and wait for prices to rise, which puts them at a significant disadvantage.

The government may need to step in and support farmers during this difficult time. This could include financial assistance, storage facilities, or other measures to help farmers cope with the lower prices.

Challenges Facing Czech Agriculture

The challenges facing Czech agriculture go beyond the current situation with wheat prices. The sector has faced several challenges in recent years, including climate change, changing consumer preferences, and changes in trade policies.

Czech farmers must adapt to these challenges to remain competitive in the global market. This may require significant investment in new technologies, training, and education.

The government also has a role to play in supporting the development of the agricultural sector. This could include investment in research and development, infrastructure, and policies that promote sustainable agriculture.

Opportunities for Czech Agriculture

Despite the challenges facing Czech agriculture, there are also significant opportunities for growth and development. The country has a long tradition of agriculture, and there is a strong demand for high-quality, locally-produced food.

Czech farmers could take advantage of this demand by investing in new technologies and techniques that improve the quality and efficiency of their production. They could also focus on developing new products that appeal to changing consumer preferences, such as organic or specialty foods.

The government could support this growth by promoting local agriculture and incentivizing farmers to adopt sustainable practices. This could include subsidies for environmentally friendly farming practices or funding for research and development.