Agricultural companies look to 2024 with high hopes

Agricultural enterprises see the future positively again – this is shown by the latest, fourth-quarter results of the K&H agricultural index. Their confidence jumped from -10 points in the previous quarter to 12 points, thus their expectations returned to the positive range. “In the third quarter of 2023, according to KSH data, the added value of agriculture increased by 88.2 percent compared to the same period of the previous year, which can be explained by the lower base, however, this good performance is also reflected in the mood of the companies, as they start this year with higher hopes. The positive change in the index is due to the fact that they are expecting higher financial results compared to the previous quarter and are also optimistic about the European Union tenders,” said Zoltán Demeter, Head of the Agricultural Business Division of K&H, the best digital bank of the year.

You can double your profit

The positive mood is most pronounced in financial expectations. This year, the companies expect a 6.5 percent increase in sales revenue and a 4.6 percent increase in profit, compared to 4.7 percent and 2.3 percent in the previous quarter. The level of profit expectations has therefore doubled. Despite this, there was no change in the investment intention, 54 percent of the companies are planning development in 2024, primarily in the IT field (27%).

They are also optimistic about the EU tenders in agriculture

More than half of the businesses (57%) consider it realistic that they will be able to get EU funds this year. Among the sectors, this rate is the highest here, as 54 percent of industrial and construction companies, 39 percent in commerce, and 37 percent of service companies think so. “Agriculture is a very intensively supported sector in the European Union. Out of the total budget of 1,643 billion euros for the 2023-27 cycle, roughly 387 billion euros go to agriculture, which is almost a quarter of the entire support package. Therefore, it is worthwhile for farmers to pay attention to the tenders that will be published in February, in which sustainability investments are also heavily emphasized,” emphasized the expert.