ForFarmers: more feed and profit in the first quarter

Thanks to the acquisition of Vleuten-Steijn Voeders, ForFarmers sold more compound feed in the first quarter. The company from Lochem performs particularly well on the mainland, in the Netherlands, Belgium and Germany. The market in Great Britain does present some challenges.

ForFarmers is satisfied with the results for the first quarter. In the Netherlands, the company grew, both organically and through the acquisition of Vleuten-Steijn Voeders. Volume in the cattle sector recorded a slight gain. The consequences of the phosphate reduction plan will probably not have an impact on the results of ForFarmers until the summer. Despite expects ForFarmers relatively little shrinkage as a result.  

Vleuten-Steijn
Despite the decline in the pig herd, ForFarmers sold considerably more pig feed. This is a direct result of the acquisition of Vleuten-Steijn Voeders. Subsidiary Reudink also saw an increase in feed sales in the organic segment. In Belgium and Germany, ForFarmers grew in all sectors as a result of new customers.

Great Britain negative exception
The market in Great Britain is less rosy. Feed volumes in particular are declining in the cattle sector. Despite the fact that the milk price has risen from a deep price trough, British livestock farmers are hesitant to make investments and expansions. This is also due to the upcoming Brexit.

In the British pig farming sector, the long-term decline in volume has come to a halt. However, volume growth is not yet discernible. The devaluation of the British pound also has a negative effect on the results of ForFarmers, which are expressed in euros. A small bright spot is the reorganization on the other side of the North Sea. This leads to lower costs.

More profit, share in the elevator 
The volume growth, in combination with higher raw material prices, means that ForFarmers saw its total turnover grow in the first quarter of this year. The good results on the mainland therefore outweigh the contraction in Great Britain. On balance, ForFarmers made a fraction more profit in the first quarter. 

The ForFarmers share reacted well to the quarterly report on Thursday morning. In the course of the morning, the share even briefly traded above 9 euros. Anyway ForFarmers is performing well this year at the Amsterdam Midkap. Since the end of January, the share has already appreciated more than 2 euros.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.