Will rental land be a scarce commodity next year?

This season, according to insiders, there has been no major shift in the availability of rental land. This applies to both the Netherlands and the surrounding countries. However, a trend has been visible over several years that dairy farmers are renting out less land. They need land to store their slurry and grow more animal feed themselves. However, no major shift is noticeable in that area (yet).

Landlord is going to charge
Arable farmers with an extensive crop plan, who are used to renting out part of the crop to fellow growers, may take a different path next season. Especially in the southwest, or so the idea. The Zeeland arable farmer Jan Moggré considers this plausible. He is also a business advisor at Agro Adviseurs Zuidwest. "In addition to a higher wheat price, a factor in Zeeland is that grain requires less water than potatoes or onions. This is becoming an increasing challenge." Moggré not only thinks that landlords will grow more grain themselves. "Tenants are also going to calculate correctly. There is a lot of risk with them. Due to the size of the company, a lot of product is usually fixed in advance on the contract. If the harvest is disappointing, you can absorb the blows yourself."

The biggest pain may not be with ware potatoes, thinks Countus advisor Erik Arts. In his working area Flevoland, he mainly sees seed potato growers with concerns. "The expectations for the coming season are not positive. The idea is that Africa needs its financial reserves first to buy grains and then maybe onions and potatoes. Seed potatoes only come after that. It is not direct food, because it still needs another year. grow. They put their own harvest in the ground to propagate it themselves. The costs also rise sharply in seed potato cultivation, which may make growers less eager to rent land."

Less sugar beets
Arts in Flevoland does not see a change to more grain happening overnight. "Companies are very specialised. Grain prices may have risen, but the margin does not change much due to the higher costs. I see that arable farmers throw a crop like sugar beet out of the crop plan. Wheat is preferred if you look at the soil. Less (seed) potatoes do not happen quickly. That is difficult to say for onions, partly because market expectations are still uncertain. A lot depends on the position of Africa."

Like Moggré, Arts expects to see a different picture in the southwest of the Netherlands. "Agricultural companies there have a broader construction plan, which means they switch sooner. A company that has invested enormously in (seed) potato cultivation over the past ten years does not quickly change its business operations. It takes several years." Both advisors emphasize that knowing your cost price is crucial. Certainly with the current costs for fertilizer, crop protection products, fuel, labour, mechanization and more. This season, some companies can still draw on the relatively cheap fertilizer purchased last summer. The fact that the prices will be at a completely different level in three months, when the pre-sale starts, is already clear.

Major financial differences
At the same time, arable farmers who have waited a long time to purchase this season had to do so for the top prize. This extrapolates the differences between them. "Those differences in cost have always been there," says Moggré. "I have supervised study clubs for thirty years and always see financial differences of 100% or more. I attribute this to three factors: Entrepreneurship, your soil & climate and your origin. Arable farmers themselves are most likely to blame entrepreneurship, although you do not always have the circumstances in the hand. Luck certainly plays a role, but you make the difference yourself." Moggré mainly compares figures from larger companies because they usually participate more often in a study club. "Larger entrepreneurs usually perform better financially, but there are exceptions. A smaller entrepreneur who does it on a low budget or in a completely different way."

Back to the key question: What will happen to the availability of rental land next season? The estimate for the southwest is that owners sow more grain on heavier soils. This season has also had a difficult start. Tenants give up or landlords take back control. This is also visible in Belgium and France, where a lot is also rented out for potato cultivation. The current price level moves companies to buy it themselves, or to have it done for them. More grain is also sown in the sand regions of the south and south-east of the Netherlands. This trend is already very noticeable this season. Corn is also popular. In the northeast, this trend is less visible and sugar beet is still being used. Flevoland and the northern clay area continue to focus on high-yielding crops.

Costs of rental land are rising
Less rental land can create a price-increasing effect when scarcity arises. It is very difficult to make statements about this. Both advisers dare and cannot do that. "Every grower pays a different price, so we don't use averages for this," both say. Everyone agrees that prices are going up. Lease prices are also rising and higher costs mean that the rent has to go up as well. Link that to significantly higher inputs and an uncertain market† It makes entrepreneurs think. It's not that far yet. Growers are fully in the current season with all its perils. The first cultivation plans and agreements will be made again from the (late) summer. Then it becomes clear whether we can really speak of a shift.