The financial problems of Germany’s largest agricultural trader, which has a stake in Lagerhaus’ parent company RWA, are worrying farmers. The Bavarian Raiffeisen Beteiligungsgesellschaft, the Austrian Raiffeisen Agrar Invest and banks are now supporting BayWa with 550 million euros.
The debt crisis at Germany’s largest agricultural trader BayWa, which has a major stake in Lagerhaus’ parent company RWA in Austria, is having a noticeable impact: many worried farmers, especially in southern Germany, are turning to other buyers for their grain harvest. Now an aid package is intended to provide some relief.
Due to its large market share, BayWa’s insolvency in the agricultural sector is virtually impossible. The two main shareholders – the Bavarian Raiffeisen Beteiligungsgesellschaft and the Austrian Raiffeisen Agrar Invest – as well as creditor banks have therefore pledged financial injections of EUR 550 million as an aid package. Most of this is in the form of loans of just under EUR 400 million. And a restructuring report from the management consultancy Roland Berger is expected to be available in mid to late September.
The shareholder structure of the agricultural group BayWa. APA / Christina Uhl
Private agricultural traders are receiving significantly more enquiries from farmers looking for a buyer or a storage facility for their harvest. Similar reports can be heard from the numerous agricultural cooperatives.
“Impact on the entire industry”
“BayWa’s problems have an impact on the entire industry,” says Michael Osterholzer, managing director of the Osterholzer agricultural trading company of the same name in the Lower Bavarian municipality of Massing. There are considerably more inquiries from farmers. “For the first time, we have rejected grain at one location because we no longer have space,” says Osterholzer. “But that is not BayWa’s fault alone.” Many farmers still have grain from the 2023 harvest stored.
“The BayWa problem shortly before the harvest has led to some confusion and uncertainty,” says Bernd Zehner, head of agricultural trading at the medium-sized Zehner Group in Bad Königshofen in Lower Franconia. “It’s not just the farmers who are affected, but also all other market participants who are involved in the various marketing chains.” However, the increase is not as large as initially reported. The effects are also regionally limited: in the north and west of Germany, other agricultural traders are more important than BayWa.
Great uncertainty among farmers and processors
It is not known how many customers were lost among BayWa’s farmers this summer. The situation is already difficult for many farmers and prices on the agricultural market are constantly fluctuating. In this respect, many companies are obviously playing it safe when looking for a buyer for their harvest. Due to the developments at BayWa, there has been “great uncertainty not only among farmers but also in the entire agricultural sector, including processors,” says Robert Leidenberger, partner at the agricultural wholesaler Josef Marschall in Schwaig near Nuremberg.
BayWa also buys harvest
BayWa, which emerged from the cooperative movement, not only supplies farmers with seed, fertilizer and agricultural machinery, particularly in its core Bavarian areas and in the new federal states, but also buys the harvest. There are no exact figures, but according to a rough estimate by a leading expert, BayWa’s market share in Bavaria could be around 40 percent, followed by agricultural cooperatives and private traders with around 25 percent each.
In 2023, BayWa was in the red for the first time in its 100-year history, due to crushing billions in debt. Financial liabilities alone amount to 5.6 billion euros. A few weeks ago, the company made its “strained” financial situation public. The main problem is the interest costs of the high debts; in the first quarter alone, BayWa transferred almost 100 million euros to the lending banks.
