News Onion Analysis 2019
Are hard numbers a danger or luck for the sector?
2018 was an eventful year for onion yield measurement. Several parties and ministers discussed the correctness of the figures and whether the market may be influenced by them. In 2019, the yield estimate will therefore be carried out in a new style.
Since 1931, the Central Bureau of Statistics (CBS) has been carrying out yield estimates for several agricultural crops, including seed onions. Statistics Netherlands is obliged to collect this data and provide it to the European Commission, after which it is published in the European database: Eurostat. However, this only applies to the final revenue estimate at the end of January. The preliminary estimate, which will be published in October, is an additional reporting tool.
Figures do not show a clear picture
Since not all crops have been harvested in the preliminary harvest estimate, these figures may deviate from the definitive data. Quality also plays a role. When the discussion about the reliability of these figures was unleashed in 2018, Statistics Netherlands provided clarity. "That is not easy, because the figures overwrite each other," says Cor Pierik, agricultural economist at CBS. "Between 2010 and 2017, the final estimate turned out 4 times higher and 4 times lower." The idea that the final figure always ends lower was thus disproved. In the historically dry year of 2018, the final figure also deviated. The yield in January was 11% higher than at the end of October, which is the largest percentage deviation since 2010.
Minister Carola Schouten (Agriculture, Nature and Food Safety) acknowledges that these figures can influence pricing. However, according to her, there is not 1 chain that profits more or less. Earlier, Minister Eric Wiebes (Economic Affairs and Climate) said that the agricultural sector could make its own decision. Schouten put a stop to that. The preliminary estimate, which is not mandatory, also remains. According to Schouten, there was no question of market disruption. "However, the yield estimate is not unique to CBS", Pierik explains. "CBS conducts research for many other sectors, whether it concerns the occupancy rate of hotels or inflation figures. All these numbers can influence a sector."
New method
Wiebes decided to give the sector a say in the production of the figures. A so-called expert group, in which the advocates, arable farmers and traders are represented, are first shown the figures and the accompanying press release. With their knowledge they can test the figures for truth and give their opinion. However, CBS remains ultimately responsible for the publication and determination of the figures. According to Pierik, deploying such a group is not uncommon. "This is also the case for vegetable crops, but it is also used in other sectors."
Statistics Netherlands normally publishes the provisional figures at the end of October or the beginning of November, but this date has now been postponed by 2 weeks. In addition, CBS will indicate an uncertainty margin, which should better reflect the uncertainty of the harvest estimates. This modified methodology has not yet been applied for the 2018 harvest. This will be the case from harvest year 2019.
Varying reactions
Adjusting the methodology and performing the yield measurements probably cannot withstand everyone's approval. There is division among arable farmers, with sometimes the idea that less information is more positive. Today, however, it is easier to collect data (e.g. through precision farming techniques). In addition, various organizations (VTA, Delphy and Boerenbusiness) test harvests were carried out. Early 2019 is Boerenbusiness started with the Crop tour Onions, where the growth and yield of 7 onion plots was followed.
The national distribution appears to be of great importance in providing a realistic picture of the situation. In an extreme year, where irrigation is an important yield factor, figures can be clouded by various regional influences. The published yields can therefore never withstand the approval of everyone. An average yield is nobody's profit.
Stock measurement onions
In addition to a yield estimate, the Dutch onion sector also had a stock measurement for years. This was facilitated by the Hoofdproductschap Akkerbouw. For onions there was the Bureau Onion Market Information (BUI), as sister of the Bureau Potato Market Information (BAI). In 2011, however, the product boards were dismantled by the House of Representatives. At that time there were still 17 product boards (mainly for the agricultural sectors). At its peak, just after the war, there were nearly 60 product boards.
The cooperative idea has diminished over the decades. In 2008 the Product Board Arable Farming was established. Together with the HPA, this was abolished on 1 January 2015. The Ministry of Economic Affairs took over the public duties. A number of other tasks, often based on research, were taken over by the new Branch Organization for Agriculture. There was no more room for a stock measurement. In addition, doing a stock measurement is probably also sensitive in the sector. It is therefore questionable whether this will ever return on a national scale.
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Niels van der Boom
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