News Income estimate
Corona takes a bite out of farmers' incomes
The corona pandemic is having a negative impact on earnings in the agricultural and horticultural sector. The average income of all sectors fell by €2020 in 20.000 compared to the previous year, despite various support programs launched by the government. Pig farmers in particular saw their income evaporate.
This is apparent from the income estimate that Wageningen Economic Research (WUR), together with Statistics Netherlands, has traditionally carried out again this year. The estimated average income is €54.000 per unpaid annual work unit, a technical term for a cooperating family member. It should be noted, however, that the effects of the second wave have only been partially included.
Given the sharp drop of approximately €20.000, it should be borne in mind that revenues in 2019 (€73.000) were excessively high. Nevertheless, the estimated income this year is also below the long-term average of €59.000, although the difference is not very large. The extremes between the different sectors are, as usual, extremely large this year.
Pig farmer's income decimated
Estimated revenues are reacting strongly to corona in every sector. Pig farmers will see the benefits fall by no less than €2019 to a loss of €295.000 after the top year of 46.000. This is due to the fall in prices on the pig market due to corona, but especially due to the outbreak of African swine fever in Germany, which is putting pressure on the European market.
Income in pig farming was the industry leader last year, but this year it is at the bottom. Although peaks in income in pig farming are common, they are very extreme this year. Despite the sharp drop in income, pig farmers generally still have a lot of fat on their bones.
Slight decrease for dairy and veal farmers
Dairy farmers see their income drop by €6.000 to €43.000, mainly as a result of the low milk price due to corona and the increased feed costs. The fall in income is inhibited by a higher production per cow. Just like last year, a similar decrease can be seen in organic dairy farming to €41.000. The much-discussed veal sector sees revenues fall by €5.000 to €41.000.
The corona problem appears to be not too bad in the sector. This is because the income is mainly based on fixed prices in integrations that will probably not feel the corona blows until next year. The free fatteners are already dealing with the negative consequences of the drop in demand this year. Goat farmers see their income increase by € 2.8000 to 134.000 thanks to a higher milk price.
Drop in demand affects potato grower
The average income in arable farming this year is €41.000. That is slightly below the multi-year average of between €40.000 and €45.000. In the extremely dry year of 2018, income was clearly above this level. The 2019/2020 sales season ended with very low prices for free ware potatoes, also as a result of corona, which has severely affected sales opportunities and exports.
CBS and WUR estimate the price drop to be more than 30% compared to 2019. No distinction is made between chips, table and seed potatoes. The slight increase in the yield per hectare of 1,3% is by no means sufficient to compensate for the fall in prices. The income for starch potato companies is estimated at €30.000 per annual work unit. That is several thousand euros more than in 2019.
Beets, onions and grain
The basic price for sugar beet partly consists of a contribution from Cosun's subsidiary Aviko. Due to the poor conditions in the potato sector, there will be little or no contribution this year. This is expected to result in a 5% decrease in the financial hectare yield compared to 2019. For onions, a price increase of 35% is estimated compared to 2019.
A combination of smaller acreage, lower yields per hectare and increased demand are responsible for this increase. For cereals, production in several large grain-producing countries is lagging behind due to drought. The demand on the world market is high. It is estimated that the grain price for the 2020 harvest will increase by 8% compared to 2019.
Wouter Job
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