Liquidity position on dairy, pig and arable farms decreases |
26/10/2018 |
The average level of the current account position in dairy farming amounted to 4,100 euros in the third quarter of 2018. This is a decrease of 3,300 euros compared with the previous quarter. The main cause is a decreased milk yield. Compared with the previous quarter, there were fewer investments, fewer loans and fewer allocated costs. The persistent drought will affect feed production. Nevertheless, the effect on the liquidity position as yet is limited. In winter or early spring it will become clear whether there is a shortage of roughage and to what extent this is accompanied with costs in the form of roughage and concentrated feed purchases.
In the third quarter of 2018, the current account position of pig farms decreased by 7,500 euros compared with the second quarter and amounted to 11,400 euros at the end of September. At the end of November 2017, the current account position peaked at almost 50,000 euros. Increased costs of feed and manure removal and lower yields for fattening pigs and piglets are the main causes. Sow farms in particular saw their current account position decrease as a result of lower piglet prices. As a result of cheaper piglets, fattening pig farms had lower expenses, enabling them to clear part of the decrease in revenues. Consequently, there is no contrary development in the liquidity position on sow and fattening pig farms. For the fourth quarter of 2018, selling prices for fattening pigs and piglets are expected to remain low. Piglet prices have hit bottom for now. Fattening pig prices are not expected to improve for a while due to an abundant pork supply in the EU.
The courant account position of arable farms shows a decrease in the third quarter of 2018 of almost 19,000 euros to an average level of more than 4,000 euros. The third quarter of 2017 also showed a significant drop in liquidity: almost 16,000 euros. This is traditionally a period in which expenses are higher than revenues. The financial yields for crops are expected to show significant variations between farms due to the drought.
Wageningen Economic Research's liquidity monitor provides a monthly overview of the development in the current position of agricultural farms and is published each quarter on the Agro and food portal. The main goal of the monitor is to share insights with entrepreneurs and to support them in their operational management. The liquidity monitor is the result of a public-private partnership between Wageningen Economic Research, the ministry of Agriculture, Nature and Food Quality and ABN AMRO. Agrifim's accession to the partnership has led to a liquidity monitor for pig farming quarter. More information on current developments of the cash position in dairy farming, pig farming and arable farming can be found via the links to the Agro and food portal below. For the news item on the results, please see the ABN AMRO bulletin on dairy farming, pig farming and arable farming.
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