Home » Issue 29-2024 » Farm report » Under cost pressure: Balticagrar SIA, LV

Under cost pressure

The gold-rush mood for large agricultural farms in Eastern Europe is definitely over. Nowadays, only those are successful who have their farm under control at all levels. terraHORSCH spoke to Florian Reitzle, managing director of Balticagrar SIA in Latvia.

We meet the farm manager at the end of September 2024 via Teams. Florian Reitzle is relaxed. He finished sowing the day before. Now the arable farm is gradually settling down for the winter. Although a major growth step was taken only recently. “We increased our arable land from around 3,200 ha to 4,500 ha,” he reports. ‘We took over an entire farm which was restructured after two difficult years. All in all, agriculture in Latvia is facing changes. Many farmers are backing out. The cost trend simply no longer matches the producer prices. It is not so much the small farms with 10 or 20 hectares that are giving up, but rather the large ones with 500 to 1,000 hectares. Another problem is the farm succession. And some quite simply made unreasonable investments.”

Florian Reitzle has been managing Balticagrar since 2023. He trained in agriculture and studied in Kiel and has already worked on several farms all over the world - with animal husbandry as well as with only arable farming. “My first contact with Balticagrar came about when I came to Latvia as a harvest and seeding hand during the 2013 semester break,” he remembers. “I actually wanted to go to the black earth region in the Ukraine after passing my bachelor's degree. But as it was a war zone during the Crimea crisis in 2014, I turned to Latvia again. The farm had just added some additional land, and the owner wanted to retire from the operational business and had hired a farm manager. So we agreed on a fixed-term contract for one year. I came straight from university and didn't speak a word of Latvian. In the first year, I was the general dogsbody: among other things, I brought food to the fields and refuelled the tractors. From a human point of view, it was a good match. The manager soon oriented himself differently. As a result, I became more and more involved in planning issues and was allowed to make suggestions. From 2016, it was clear that I would stay. As an agronomist, I had more freedom and could try things out. Some things worked, others sometimes didn't. In 2022, the owner retired completely and handed over the management to me. However, we are always in close contact because he is not just an investor, but a farmer who wants to know what is going on the farm. I myself feel completely at home in Latvia. I have my family here and I am very happy. Moreover, Germany is only two hours away.“

The employees are a major challenge. “18 people work at the farm including the owner and myself. But not all of them work directly at the farm. We have eight tractor drivers, two lorry drivers, a cook, administrative and workshop staff as well as additional harvest helpers. Our core team is great! But it's difficult to recruit more staff. School in Latvia ends after nine years. Some start to work immediately, others go to a vocational college. They rather learn theoretical stuff, but also have internships. The best thing is to offer graduates a job after their graduation and then provide them with further training at the farm. To me, it is important that I don't lead from above as it still often is the case in large farms in the East. I want us to cope with the tasks together as a team. That's why we always talk to each other and exchange information and ideas.”

The year at Balticagrar

As the vegetation period is short, the machinery stock is rather generous. Balticagrar used to rely on a US tractor manufacturer. Since 2018, the farm has switched completely to Claas. They have four own Lexion combines with 12-metre cutting units.
At Balticagrar, the agricultural starts at the beginning of February. This is when the maintenance and service tasks for machines are carried out. From the first of March, Florian Reitzle turns his attention to the fields: “We start to spread mineral fertiliser. But at this time of the year, there always are sudden onsets of winter. If everything goes well, the beans are sown in the last week of March, but it usually is delayed until the beginning of April. At this time, the spring crops are sown, too, starting with the legumes. Sufficient soil temperatures are a prerequisite. If it is too cold or too wet, there is no point in seeding: the spring cereals will not gain momentum. Spring wheat is drilled as of 20th/25th April until the first days of May. Plant protection measures start in mid-April. The rapeseed blossom starts around 10th May. For me, this is the most beautiful time of the year! In June, the days are very long. We are very far up north. As of the middle of the month, it doesn't get really dark. What you have to know: the most important public holidays here in Latvia are around midsummer. Everything comes to a hold. Even in agriculture.

Then we start preparing the harvest. At the same time, we organise the spreading of lime and organic fertiliser - up to 5,000 tonnes every year. We transport them ourselves from our own harbour jetty to the field. Winter barley is usually harvested between 10th and 20th July. This is our only fodder crop, everything else is food. All of it is exported. Then we immediately continue with the rapeseed harvest. In addition, the organic fertiliser is applied, the Cruiser is used for incorporation and a second pass is carried out. Rapeseed seeding with the Focus starts on 1st August. Whether we are already harvesting wheat by then is usually not quite clear. When time is of the essence, we harvest in the morning, work with the disc harrow at midday and with the drill in the evening. This is certainly not ideal from an agronomic point of view, but it has to be done. Winter barley takes up around 5 to 10 % of our farmland. This allows us to untangle things considerably. Threshing is in full swing at the end of July/beginning of August starting with the baking wheat. For in a wet summer, the falling numbers can quickly plummet.
The harvest of the winter crops lasts until approx. 20th August. During this time, things are really cooking at the farm: the combine harvesters are working, auger wagons are on the move, organic material is being spread, tillage is carried out, rapeseed and catch crops are sown ... There often are ten to 15 machines in the fields at the same time. My job is to keep everything running smoothly. I'm constantly travelling to and fro by car and often cover 500 km a day within a radius of 50 to 60 km. But it's also extremely important for me to keep an eye on everything. I want to know how the crops have developed on the different fields, how tillage and logistics are working.
Harvest time ends at the end of August/beginning of September with the field bean harvest. In the last days of August, the focus is on tillage, ploughing and seedbed preparation. We start drilling barley at the beginning of September. But the question always is how much land we have been able to prepare. This year, we started with two drills and were able to get 250 hectares into the ground. I try to create buffers and sometimes to change systems during the process because waiting is not an option. In this case, the house of cards collapses. Seeding mistakes are not forgiven in Latvia. What you can't do here and now, you won't be able to do tomorrow. The 2023 seeding season was disastrously wet. We caused structural damage, the roots didn't develop well and the harvest was poor. This year was much better. We were able to sow 85% in dry conditions. Rain always comes afterwards. And so far, the population is looking good. But it's still a long way to a successful harvest. However, there is little I can do over the winter. Apart from hoping that there will be no floods or heavy frosts. Winter damage is always a problem in Latvia. But if I thought about it all the time, I wouldn't be able to farm here. At the end of September, one or two herbicide treatments are still in progress, especially for monocotyledonous weeds, potash is applied, fields are prepared and mulched. Shortly before Christmas, things quiet down on the farm and then work is resumed in February.”
Storing the harvest is a major logistical challenge. Four combines with a throughput of 50 tonnes per hour manage 1,500 tonnes per day. The bottleneck is the drying process. The grain is first stored temporarily on a concrete slab. The continuous dryer has a capacity of 40 tonnes per hour and runs for 24 hours. On average, the grain has a moisture content of 17 to 18% at the time of the harvest. In dry years, some grain can also be stored without a dryer. The farm increased its storage capacity: three silos with 3,200 m3 each plus two halls with a total storage capacity of 18,000 tonnes. The silos were built in 2021 and filled for the first time in autumn. In February 2022, half of the rapeseed and half of the wheat were still unsold. On the day Putin invaded the Ukraine, the investment had already been amortised.
“Our harvesting capacity amounts to over 22,000 tonnes,” Florian Reitzle reports. “We have to transport a large part of this directly to the harbour. But this is difficult to realise, especially when the harvest is not ideal and with regard to the current financing costs. Next year, we will work with five combines. We will probably have a capacity problem, but we will certainly solve it,” the farm manager says with a smile.

Experience with HORSCH

Balticagrar has been working with HORSCH technology since 2006. In 2005/2006, there was massive winter damage and they needed a powerful drill. The Pronto was the first of its kind in Latvia. The first Leeb machines came in 2012. They were still ordered under this name but were already delivered as HORSCH Leeb. “It was a little bit difficult at first, but thanks to a great service and a lot of personal commitment - also from Theo Leeb - we got everything under control. In 2020, two HORSCH Leeb 12 TDs were delivered and in spring 2024 a PT self-propelled sprayer. The latter investment would have been difficult to manage on our own, but we were subsidised by the EU for the purchase. We now have significantly more capacity and are at the cutting edge with regard to technology.

We have been working with the Sprinter since this spring. The expansion of the land that was already in the offing tipped the scales. But also the lesson we learned from the wet year 2023 that more seed drill capacity is not a mistake. We mainly use it for direct seeding to save water. Initially, we were able to obtain a pre-series machine which we tested extensively in a wide range of conditions and finally purchased. We like the wide range of different tines, e.g. the Ultra ThinEdge 12 mm type which we use for field beans for a seed depth of up to 8 cm. For cereals, we use narrow and wider points up to 20 mm in soils that have been lightly cultivated with a disc or chain disc harrow. We only have gathered initial experience in this sector - but the crops sown this autumn look fantastic.
We use a Cruiser or a Joker with a working width of 12 metres to incorporate manure. We like the nice mixing effect of the Tiger XL for medium-depth tillage resp. the second stubble cultivation. As we work almost exclusively without a plough, we use two Terrano FM for deep, crumb-loosening, non-inversion tillage of 25 to 30 cm.
The Focus is our key machine for rapeseed seeding. We pre-loosen the soil at a depth of 30 cm and sow in a 35 cm band. I drove it for the first time in 2013 as a harvest hand. Back then, the results looked a little bit wild. After all, we came from seeding after a plough. And we didn't have the coulters we have today. Nevertheless, we continued to work with the machine. Rapeseed developed phenomenally and had a head start, so that it even made it through the winter damages of 2013/2014. This was a good financial support. It has been a given ever since! Now we're preparing the soil intensively so that we have more fine earth on top. And the steep back of the ULD coulters means that no clods are transported upwards. In a slightly modified form, the Focus also drills approx. 20 % of our cereals. We modified it a little bit with a second seed bar. It works asymmetrically at a distance of 12 to 23 cm. The idea behind it is that the roots can spread in the loose horizon. The populations close a little bit later and aerate more quickly. This results in fewer fungal diseases.”

Perspectives

The impact of the war in the Ukraine is obvious. “Last year, a lot of cereals came into our harbours from there. This year, however, the impact was less. However, the biggest impact was in the fertiliser sector. From one day to the next, good quality at reasonable prices was no longer available. But this also has stabilised again.“
Florian Reitzle is cautious about the prospects for the farm: “Perhaps the size of our farm will no longer be politically desirable in the future and the EU will force us to work with 1,000 ha units? As far as we are concerned, we are open to anything. But with regard to growth, we can hardly get any bigger in our structure. However, we have a high share of our own land and equity capital. We have to secure both. The same is true for the yields. We will definitely remain innovative, but we will not follow every hype. Politics remains an important factor. We would like to work without premiums and the CAP, but we can't. Our biggest challenge in 2025 will simply be to farm 1,000 ha more.”