News Income estimate
Income and expenditure rising in arable farming
The higher prices for potatoes and wheat, among other things, are reflected in the estimate of income from arable farms that Wageningen Economic Research (WUR) and Statistics Netherlands presented this afternoon (Monday 20 December). On the other hand, cultivation costs have also increased in the past season.
The estimated income in arable farming per unpaid annual work unit (aje) has increased by more than €25.000. The average annual income per unpaid aje is therefore €58.000. There are, however, major differences between the companies. More than 20% of companies have an income that remains below or at €2.000. At the other end of the spectrum is an equally large group of companies with an income per unpaid annual work unit of €98.000 or more. The net cash flow position has also improved compared to last year. At 64% of the arable farms, sufficient money was received to meet the payment obligations, including repayments. That is 7% higher compared to a year earlier. The profitability is on average €95 in revenue per €100 in costs.
Crop prices are rising
The potatoes of the 2021 harvest are expected to yield more compared to a year earlier. Sales and pricing of 2019 and 2020 harvests were difficult due to corona. Although corona has not yet gone away, CBS and WUR expect a clear price increase for the 2021 harvest. It should be noted that the contract prices are slightly lower than a year earlier. On the grain market, the higher prices were mainly caused by a smaller harvest in a number of large grain countries and very good global demand for, among other things, wheat. The WUR also assumes a price increase for sugar, mainly due to higher prices on the world market.
Onion market less positive
The outlook for the onion market is less positive. WUR and CBS assume that approximately 20% more onions have been harvested compared to last year. This is partly due to an expansion of the acreage, but the yield per hectare was also higher this season. That is why the WUR takes into account a price decrease of 25% for the onions of the 2021 harvest compared to the 2020 harvest.
Costs are also rising
"On the cost side, among other things, the crop protection item is significantly higher compared to a year earlier," says Bert Smit, arable researcher at WUR. "Due to the relatively wet summer, farmers had to spray more against fungal diseases such as phytophthora. In addition, inputs such as fuel and fertilizer have also become considerably more expensive last year and that trend is expected to continue next year." According to Smit, seedbed preparation will be significantly better than a year in 2021 due to a little frost in the winter. "As a result, arable farmers have been able to save on diesel in the spring. Due to sufficient rainfall during the season, significantly less rain was done. The relatively wet conditions during the harvest partly canceled out those fuel savings."
LTO: Higher price on the shelves inevitable
The higher yields in some agricultural sectors are often offset by rising raw material costs and the costs of regulations, LTO Nederland responds to the income estimate. "A fairer distribution in the chain and a higher price on the shelves is also unavoidable in our view. Fortunately, the new coalition agreement offers the possibility of non-binding agreements with the rest of the chain, to improve the earning capacity of farmers and horticulturists. to improve."
Jurphaas Lugtenburg
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