News Rabobank
Agriculture is growing past 2019 level this year
Rabobank expects the agricultural sector to grow beyond the 2019 level this year. There are differences, however. In arable farming, a decline in turnover of -1% is expected, while Rabobank expects a growth in turnover of 4% for land-based livestock farming.
Rabobank today published a series of studies. The Dutch economy is expected to grow by 3,8% this year and 3,7% next year. Gross domestic product is likely to return to pre-coronavirus levels in the third quarter of this year – faster than in other European countries. Not all sectors will recover this year and some will not recover next year, such as the hospitality industry.
Against the background of a strong recovery in the economy, concerns are growing about the development of the average price level, or inflation. "We expect inflation to be higher than last year, but to remain relatively contained. For 2021 we expect 1,8% followed by 1,7% in 2022," the economists said.
Pork price expectations above average
The turnover forecast for the pig sector is -2% this year and 2% next year. Due to the lower production of pork in Asia as a result of African swine fever, the demand on the world market is still high. While this demand will decline, price expectations for 2021 and 2022 are above average.
Better milk pricing
The prices of basic dairy products are rising. "Because many parts of society in the world are 'unlocking' again, the demand for products with more margins is increasing. Combined with a relatively cold spring, which means that production is lower in parts of Europe, this ensures a better pricing," says Rabobank. The prospects for the coming months are therefore favourable.
More sales of veal
Wider opening of the food service in Europe will promote the sale of veal in the coming months, so that the selling prices can pick up. Focus on supply management will help with this, the bank expects. "Here too, the increased feed costs continue to depress returns. In addition, the supply of fasting calves is relatively limited due to some hot summers."
Increased feed costs
Supply control and sustained demand ensure that price formation in various livestock sectors (dairy goats, rabbits, horses) remains positive. "The increased costs of feed in particular are disadvantageous for the added value in these sectors."
The expectation for the production and pricing of fruit and vegetables is the same as last year. More luxurious products may benefit somewhat this autumn from the opening of the catering and food service, where typical supermarket products have to give up some ground.
Wholesale agricultural products to contract -4% this year
The trade sector is benefiting from the gradual opening up of society and the associated economic recovery, according to Rabobank. The differences are large within the sector. The bank expects a decline in 2020 for the sectors that did very well in 2021 (such as food and the residential-related non-food sectors). Wholesale agricultural products, which grew 2020% in turnover in 11, are expected to contract by -4% this year. Rabobank foresees a growth of 2% again next year.
Shortages of raw materials slow down industry growth
The industry recovered from the corona crisis faster than expected and will probably continue to grow next year, according to Rabobank. "This is evidenced by, among other things, increasing product confidence and increasing production." However, the industry sector managers of the bank expect that shortages of raw materials and rising raw material prices will hold back growth.
Linda van Eekeres
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