Research ABN Amro
Fewer agricultural companies bankrupt again
In the first half of 2017, 20 agricultural companies went bankrupt. This means that the number of bankruptcies in the agricultural sector is again decreasing. This will be announced by the Economic Bureau of ABN Amro on Tuesday 1 August.
The number of bankruptcies in the agricultural sector has been falling since 2013 and is therefore currently at a historically low level. Compared to 2013, there are even 73% fewer bankruptcies perceptible this year.
The bankruptcy rate is normally always low in the agricultural sector. That's because those companies have a longer lifespan. It also appears that companies in the agricultural sector have a lower rate of liquidation than companies in other sectors.
Business numbers are increasing
The total number of agricultural companies has also continued to increase since 2013. In the past 4 years, an average of about 3.000 companies were added. On the other hand, an average of 2.400 companies also closed. This means that in 4 years' time, approximately 600 agricultural companies have been added.
In 2016, there were 2.437 closures, but only 47 of these were bankruptcy. The main reason for disbanding the company is the lack of a business successor.
Finally, it appears that in the agricultural sector there is mainly scaling up† This also became apparent when Statistics Netherlands presented that farms are getting bigger.
Expectation for the near future
ABN Amro mainly expects a stabilization of bankruptcy in the agricultural sector for 2017 and 2018. This is partly because the economy is improving and prices for dairy and pork have improved. However, the uncertainty surrounding Brexit could still throw a spanner in the works in the coming years.
Dutch economy is growing
In general, the Dutch economy is doing well. The Bank's Bureau therefore foresees a growth of almost 2,5% over the coming years. This picture fits in with the picture of the decreasing number of bankruptcies in the Netherlands.
In 2013, the Netherlands reached a peak in the field of bankruptcies. At that time, no fewer than 9.431 companies went bankrupt. That number has fallen by 58% in recent years.
It is striking that the food sector (industry and wholesale) shows a significant increase in the number of bankruptcies compared to the first half of 2016 (a plus of 49%). On the other hand, a significant decrease is visible compared to 2013 (a minus of 55%).
Kimberly Baker
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