Livestock farming takes the biggest blows

Almost all sectors in the Netherlands will be confronted with lower turnover for at least another year, according to Rabobank's estimate. Dairy and pig farmers are hit hardest in the agricultural sector. There is a prospect of recovery for arable farmers. 

The corona crisis has severely impacted the agricultural markets in recent months, which has translated into lower turnovers. The financier estimates the decline in turnover for the third quarter in the dairy and pig farming sector at 15%. With such a bleak prognosis in prospect, it is likely that many dairy farmers will be teetering on a tightrope to end up in the green numbers.

Pig farmers have proverbially more fat on their bones to be able to absorb a fall in prices. Poultry farmers see their turnover decrease by 10%. For entrepreneurs in arable farming, Rabobank foresees a 9% drop in turnover from July to September.

Dairy farmer suffers for a long time
Dairy farmers will be bothered by the corona crisis for at least another year. Up to and including the third quarter of 2021, there will be a 5% drop in turnover as a result of a lower milk price, according to the bank. For pig farmers and arable farmers, the damage will be over after this year, according to the prognosis. In the last quarter, the bank still foresees a decline in turnover for both sub-sectors of 10% and 5% respectively.

Rabobank thus implies that the pig and piglet price will return to the 'old level'. That is quite a big step, given that the pig price has fallen by a quarter in recent months. The prognosis for arable income also seems a bit premature, given that the pricing for potatoes, beets and wheat, for example, is far from over. After all, we are still in the middle of the growing season. 

Storage sector benefits
Outside the agricultural sector, the prospects are gloomy. The catering industry is heading for major revenue losses of up to 70%, although that is probably no surprise in view of the restrictive measures. The construction sector and industry are also noticing the consequences of the corona crisis, as are logistics.

Storage companies, such as cold stores and freezers, are an exception to the rule. They benefit from a influx of (agricultural) goods whose sales have declined. Rabobank foresees a 10% increase in turnover for this sector for the next 5 quarters.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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