Corona will only really affect livestock farming next year

Agriculture will not really notice the economic consequences of the corona crisis until next year. Rabobank expects it to be the turn of the construction sector only then. Despite the second wave, the Dutch economy is doing better than expected, but the differences between the sectors are large.

Rabobank expects a contraction of 4,2% for this year, followed by a 2021% growth in 2022 and 2,4. In general, the Dutch economy is more resilient than expected, partly thanks to government support measures. As a result, rising unemployment has remained reasonably limited. House sales, an important economic indicator, even rose in 2020. House prices are therefore likely to continue rising in the coming years. It is also positive that consumption fell less sharply during the second wave than it did this spring.

Hospitality hit hardest
For the first quarter of 2021, Rabobank is still in the running. The financier assumes that the first population groups will then be administered a vaccine, but does not expect the corona measures to be taken off the table soon. The hospitality, transport & storage and other business services (such as travel agencies) were hit hardest this year. The bank expects a contraction of no less than 39% for the catering industry. Next year, these sectors may look up again, but they come a long way.

Agriculture and construction will still feel damage
The agriculture and construction sector will not really notice the negative consequences of the crisis until next year, Rabobank expects. The agricultural sector moves more or less independently of the economic cycle and as a result hardly showed any contraction in 2020. The drop in demand from the food service is expected to lead to both volume shrinkage and raw material prices next year. Rabobank specifically names the meat sector.

With regard to the agricultural sectors, the bank estimates a sharp contraction in intensive livestock farming. According to Rabobank, the pig sector will shrink by 9% next year compared to 2019, when the corona crisis was not yet an issue. The veal sector by 9%, while broiler poultry is heading for a contraction of 10%. The bank is more positive about the arable sector, which can increase by 2% compared to the pre-corona level.

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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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