By 2025, the Dutch agricultural sector is heading for contraction. That is ING's prediction. It anticipates a 2 to 3 percent shrinkage, partly due to the buy-up scheme affecting the livestock sector. Nitrogen problems are also affecting the sector.
For greenhouse horticulture, the bank points to good prospects for greenhouse vegetable companies and also for ornamental horticulture, where cut flower cultivation, in particular, scored well in 2024. In terms of new construction, it is difficult for greenhouse growers, though. Uncertainty about energy and high construction costs inhibit new construction developments.
The outlook for greenhouse vegetable growers remains good
In 2024, the greenhouse vegetable sector showed signs of normalization to pre-energy crisis conditions.
Companies adjusted their cultivation plans back to more exposed crops due to lower energy costs. The area under exposed vegetable cultivation (especially tomatoes) returned to pre-energy crisis levels. There has also been a massive switch to LED lighting or a hybrid form of LED combined with SON-T for lighting.
Tomato growers faced lower yields in 2024. On the one hand, this was due to fewer sunshine hours in the unlit crops, and on the other hand, because virus-resistant varieties have lower yields. Prices remained lower throughout the growing season compared to 2023. Only in the second half of the year did prices rise above the long-term average.
In the pepper crop, yields were also about 3% lower than in 2023. The dark weather in spring resulted in a slow start to production. In addition, many growers faced quality problems, resulting in lower yields.
Cucumber growers can look back on a good 2024. Price development was particularly good in summer and autumn. Demand for cucumbers, partly due to videos on TikTok that went viral, was strong.
Energy
Energy remains an important success factor for greenhouse vegetable growers. Companies with combined heat and power (CHP) once again managed to achieve good results from energy management.
Besides lower energy costs, all other cost items showed a sharp increase in 2024. Personnel costs, in particular, but also direct production costs, showed increases of 10% or more.
On average, greenhouse vegetable companies had a good year. However, the differences between companies are increasing. It is becoming increasingly important for companies to have the right location and to make use of a good energy mix. The trend of scaling up also continues in vegetable cultivation. In 2025, companies will continue to increase in size through organic growth and mergers and acquisitions. Despite currently higher gas prices, the outlook for 2025 remains positive.
Investments in sustainability remain attractive
High energy prices in recent years have led several companies to bring forward investments in energy saving and energy transition. Investments in LED lighting and additional screen cloths have been particularly high. New CHP plants are also in demand to respond to the changing energy market and consume less gas. Companies use their CHPs to regulate imbalances in the electricity grid, among other things.
Geothermal energy is increasingly used and should eventually make a significant contribution to achieving the climate goals as laid down in the covenant on energy transition in greenhouse horticulture, in which horticulture aims to be CO₂-neutral by 2040. However, a sufficient supply of CO₂ is necessary when using geothermal energy. At the moment, sufficient CO₂ is not always available for greenhouse horticulture.
The uncertain energy market will also affect results in greenhouse horticulture this year. Growers who can make use of the fluctuations in the energy market can reap great benefits. However, ING does see large differences in profitability between growers as a result and does not expect this to change in the near future.
New construction of greenhouse complexes is currently very limited due to uncertainties surrounding energy and significantly higher construction costs. ING foresees no structural changes for either factor this year, limiting the impact of new construction on the market.
Export value of floriculture sector rises
After two years of decline, the export value of total floriculture will have risen to 11.9 billion euros in 2024, according to provisional figures from the CBS. This marks an increase of over 4% compared to 2023.
In the floriculture sector, it was a particularly good year for cut flowers. Less foreign competition and lower domestic supply due to moderate weather allowed prices to rise. As a result, operating income was markedly higher. Green pot plant and bedding plant growers had a less successful year. Demand for green potted plants was clearly somewhat lower in 2024 (as in 2023), and bedding plants suffered from variable weather conditions.
Despite the new border controls as of 30 April towards the UK, exports to this country continue to run well, with growth of around 8% in 2024. However, they do face additional costs. A favorable exchange rate ratio makes it advantageous for UK entrepreneurs to buy in euros.
With 83,000 jobs, which could rise to 134,000 in peak periods, and a 9.3% share of the agricultural sector's export value, floriculture is an important sector.
ING also expects good yield prices for 2025. The price will be supported in part by further improvements in purchasing power in Europe combined with rising wages. Given the economic outlook combined with more stable energy prices, ING expects a good 2025 for the floriculture sector.