News Countus Field Index
Arable income is in free fall
De Countus Arable Farm Index March clearly shows the enormous impact that a global COVID-19 pandemic has had on this sector. In 4 weeks, the Index lost nearly 15 points, reaching its lowest level since its founding year in 2004.
Only in August 2004 – the year it was founded – was the Countus Arable Farm Index even lower. The result will be even lower at the beginning of 2020 than in the dramatically bad potato year 2017. When the Index recorded a price of 59.5 points at its lowest point.
Potato Futures Market
The reason for this movement must be sought in the price of the April contract on the potato futures market. On March 2, the Leipzig stock exchange quoted a price of €13,60 per 100 kilos of potatoes. In the following 2 weeks, this price dropped to € 4,50, before stabilizing briefly. The bottom was reached at the end of March with a price of €2,70.
This is even lower than the bottom in 2017, when a price of €4,20 was reached. In 2004 the low point was €3,65. The situation in spring 2020 is therefore unique. At the beginning of April, the price fell even further. The April contract for 2021 has stabilized. This is now stable at around €12,00 per 100 kilos.
Rising prices for onions and wheat
It is striking that the other ingredients of the Arable Farm Index recorded higher prices in March. Onion sorters and packers started hoarding product, which heralded a new wave of buying. The Emmeloord quotation for 30-60% coarsely increased by €2 to €16 per 100 kilos.
The European feed wheat quotation also increased in mid-March, after it had to surrender earlier. The price went from €186 to €207 per tonne. A price level that had not been reached since mid-January.
How further?
Has the poisoned cup been emptied or could the Index fall further? In these highly uncertain times, that question is impossible to answer. It is especially the potato sector that is experiencing very dark days, now that the demand for end products from the catering industry and events has completely disappeared. A higher home consumption does not compensate for this by far. The question is therefore how long this situation will continue to dominate the market. The entire sector is trying to find answers to this.
At the same time, many storage areas are still full of French fries potatoes and good potatoes are even emerging from the ground, which could not be harvested last autumn. This product has to find a place and the growers hope for financial compensation from the government.
Hoarding behavior
The global grain market has seen a revival due to the hoarding behavior of buyers such as animal feed, pasta and the like. Dry growing conditions in Europe and the Black Sea region are starting to make an increasingly strong noise in the market. In the short term, the price of wheat will benefit from this. The onion sector is also stable for the time being. The export factor causes, among other things, uncertainties.
This is the latest edition of the Countus Arable Farm Index. Starting next month, the monthly arable barometer will be published under the name Boerenbusiness arable index.
Niels van der Boom
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