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Dutch Greenhouse Vegetable Sector Thrives Despite Lower Production Volumes

The Dutch horticulture industry, particularly the greenhouse vegetable sector, has experienced a notable decrease in production volumes this year, dropping by five percent.

Despite this decline, many agricultural businesses have reported a successful year, attributed to reduced costs and higher prices compared to the previous year. This trend is expected to continue, with ABN AMRO forecasting a five percent growth for horticulture and a seven percent increase for ornamental horticulture in 2024.


Greenhouse Vegetables: Prosperity Amidst Reduced Volumes

The greenhouse vegetable sector faced a substantial volume reduction in 2022, continuing into this year.


The primary cause was the exit of several operators and reduced usage of artificial lighting last winter, influenced by the high energy prices at the start of the year. However, with gas prices now lower and more stable, a production increase is anticipated in 2024.


Despite the lower production, greenhouse vegetable growers have enjoyed a profitable year, benefiting from higher prices for products like aubergines, peppers, and tomatoes. Cucumber prices, however, have seen a significant drop after peaking earlier in the year.


The Role of CHP and Sustainability

Greenhouse growers have gained from the disparity between gas and electricity prices, known as the sparkspread. This has been possible through the use of cogeneration plants (CHPs), which generate electricity and supply it back to the grid, while the heat produced is utilised in the greenhouses.


This approach has ensured reasonable income levels for vegetable growers, particularly for larger, modern companies that have invested in CHPs and sustainable practices.


These companies not only generate higher income through electricity production but also reduce costs through more efficient production methods.


Stable Demand and Future Prospects

The demand for greenhouse vegetables is expected to remain stable. ABN AMRO predicts an improvement in purchasing power next year, along with a continued consumer interest in healthier food options, positively impacting the demand for greenhouse vegetables.


However, the increase in volumes might slightly depress prices. Additionally, growers are facing rising labor costs, increased interest rates, and potential burden increases due to sustainability legislation. On the other hand, costs for fertilisers and gas are lower and less volatile.


Challenges and Opportunities in Horticulture

The horticulture sector is under significant pressure to become more sustainable, with social and governmental measures pushing for reduced fossil energy use.


Subsidy schemes are available for investing in energy-efficient greenhouses and renewable energy sources. In floriculture, a volume increase is expected after a 5.4 percent drop in 2022, with volumes predicted to fall by 5 percent this year.


The sector faces challenges due to competition for land with housing, recreation, and nature, which may limit or slightly reduce the available acreage for cultivation. Despite these challenges, the demand for flowers and plants seems to align with the available supply, with pricing remaining reasonably good.


Ulitmately, the Dutch greenhouse vegetable sector has demonstrated resilience and adaptability in the face of reduced production volumes and challenging market conditions.


The focus on sustainability and efficient energy use, coupled with stable demand, positions the sector for continued success in the coming years.

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