Expectations that the sale of grain stored in silos would pay for spring sowing did not come true. The reason is a large drop in the purchase price and weak demand for corn, wheat, soybeans and rapeseed. Short-term loans to finance sowing are unfavorable.
A kilogram of corn cost 34 dinars after harvest, and ten dinars less today. Whoever stored corn in anticipation of a rise in price lost earnings and paid storage costs. Aleksandra Pomorovački from Gornji Breg will, in addition, sow seven hectares of corn, and she will cover the costs of sowing in cooperation with the cooperative. “When we look all together, with oil and with other things, with seeds, the total is 80,000 dinars, while with the lease, the stake is over 120,000-130,000 dinars per hectare,” says Aleksandra.
The last year’s drought is prompting farmers to turn to crops that better tolerate a lack of moisture. “I will only sow sunflowers and I heard that the price increase is around 25 percent from last year. I will most likely finance it with a loan, and since last year I have a loan for fertilizer and seeds,” says Mihalj Išpanović, a farmer from Mužlja.
Cooperatives that use credit to finance sowing must charge the bank interest costs to the producers they finance. Currently, it is not worth it, experts say. “They say that they are asking for ten percent. You cannot make ten percent on agricultural products at the moment. So we did not take a loan. We got a lot of goods on consignment. We got a lot of goods on the condition that if it is sold – sold, if not – we can to return,” said Jožef Sandor, ZZ “Napredak” Gornji Breg.
The drop in grain prices has taken the planned earnings away from farmers. Wheat was 39 dinars, now it is 23 dinars per kilogram. Oilseed rape promises a good yield, but not the price. Currently, it is around 41 dinars per kilogram, almost twice as low as last year.
Sign up for business updates & specials.
