Dairy farmers show growth in balance

In the third quarter of 2017, the average current account balance of dairy farmers continued to grow. Compared to the end of June, the deficit has been reduced by an average of €4.200. This is apparent from the Liquidity Monitor of ABN Amro.

Dairy farmers reached their lowest point in October, which was a minus of €25.000. However, in the months that follow, an upward trend is usually visible. In January 2017, for example, it rose to a minus of €10.000. 

In the first 9 months of 2017, the milk yields on an average farm were about €0,02 per kilo higher than the 10-year average. In addition, this was about €0,10 above the milk price of 2016.

Phosphate reduction plan and feed market
The phosphate reduction plan also influenced the higher balance of dairy farmers. This is due to the income from selling livestock. In addition, the favorable growing season ensured that the dairy farmers have a good stock of roughage. As further costs have decreased over the past period, the operating balance for November 2017 has increased to €18.500. 

What will happen in the future?
With this improvement, the negative situation for the average dairy farm is behind us. "At the moment, few entrepreneurs are engaged in investments. However, dairy farmers are looking at supplementing rights that were skimmed off in 2018 or empty stable space. However, the high price of phosphate rights makes many doubt. Every dairy farmer now knows that a piggy bank is not an unnecessary luxury." says Pierre Berntsen, Director Agricultural Companies at ABN Amro.

All in all, it remains to be seen what the fourth quarter will bring, because the milk price seems to have reached its peak. One bright spot is that the Netherlands Enterprise Agency will pay most dairy farmers the payment entitlements in December.

Kimberly Baker

Kimberly Bakker is an all-round editor at Boerenbusiness. She also has an eye for the social media channels of Boerenbusiness.

k.baker @boerenbusiness. Nl

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