News Liquidity Monitor
A lot more money in the account with arable farmers
The liquidity position of arable farms increased sharply in 2018. This was mainly due to an increase in the fourth quarter, because free products were sold earlier. This is apparent from the liquidity monitor of ABN Amro and Wageningen Economic Research (WUR).
The average position on the current account among arable farmers, it stood at €2018 at the end of 32.000. That is €13.000 more than was in the account at the end of 2017. This is mainly due to the strong increase in the last quarter of 2018, because 1 quarter earlier the position was still € 25.000 lower.
Storage products sold earlier
It is not surprising that the cash position rose so strongly in the fourth quarter. Product prices have risen due to scarcity. The shortage in liquidity may have tempted entrepreneurs to sell some of the storage products earlier. In addition, the arable farmer received payment of the payment entitlements in November from the Netherlands Enterprise Agency.
The higher current account balance is also due to lower investments in 2018. On the other hand, in that year more was paid for third parties, irrigation and energy. Despite the fact that the position has increased, there are major differences between the companies. This is partly due to the difference between contract prices and free product prices.
Dal follows sooner
The fact that the majority of the products have already been sold also means that the cash position will not increase in the near future. ABN Amro expects the trough in 2019 to deepen and be reached sooner.
Anne-Jan Doorn
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