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Liquidity position in 2018 decreases on dairy and pig farms decreases and increases on arable farms

31/01/2019

The average current account level in dairy farming at the end of 2018 was 3,300 euros. This is a decrease of 5,700 euros compared to a year earlier and is especially due to a lower milk yield of more than 16,000 euros. To partly compensate for the deterioration of the current account, there were fewer repayments, investments and private expenditures and fewer drawings from savings accounts. In winter and early spring of 2019 any roughage shortage will become apparent, as will the extent in which this shortage is accompanied by costs in the shape of roughage and feed concentrate purchases.

In 2018, the current account position of pig farms was under severe pressure and decreased almost monthly to an average of minus 1,500 euros. The year was characterised by lower prices for fattening pigs (-12%) and piglets (-30%) as a result of an increased supply on the European meat market and a sluggish demand. In addition, feed costs increased considerably (+6%) during the year, resulting in fattening pig farmers' cash position being halved to 12,700 euros. On sow farms, the balance on the current account in the same period decreased by 65,000 euros to almost minus 28,000 euros. The market is expected to recover in 2019, but not yet in the first quarter. According to the EU, European pork production will increase this year by about 1% and exports will also increase in 2019.

The average current account position of arable farms at the end of 2018 is 13,000 euros higher than at the end of 2017 and amounts to 32,000 euros. This is partly due to somewhat higher crop yields and fewer investments. There were more expenditures for third-party work and energy use. In addition there was still room for repayments and transfers to savings accounts. In these representations, transfers from the current account to a savings account are seen as write-offs from the current account. Due to the drought of 2018, with large differences between farms and regions, there are also variations in the liquidity development between farms.

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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Liquiditeitsmonitor
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