Rabobank sector forecasts
What does 2018 have in store for agriculture?
The strong economic growth means that all Dutch sectors will show growth in 2018, including the agricultural sector. This is apparent from Rabobank's 'sector forecasts 2018' report.
Bart-Jan van Zandwijk is co-authored.
For the total agricultural sector (including forestry and fisheries), Rabobank expects a turnover growth of 2018% in 1,2, compared to 2017. However, selling prices will fall by 2018% in 0,3.
The arable sector
Rabobank expects the balances for arable farmers in 2018 to be lower than in previous years. "Especially for grains and sugar, the balances will be lower, and they will not climb in the coming years. We do have good long-term prospects for other arable crops," says Arjan Ausma, sector specialist Arable Farming at Rabobank Nederland. According to the bank, the demand for processed potato products in particular is growing by 2% to 3% per year. This increase results in additional sales.
In addition, the Netherlands is characterized by a high proportion of intensive crops in the cultivation plan. About 60% of arable crops in the Netherlands are of high quality. Of these, the potatoes, with 30%, are the most important crop. However, this puts pressure on the maintenance of soil fertility.
According to Rabobank, the sector can still seize opportunities by responding better to the demand for organic products. This trend will continue to grow in the next 10 years. The chain must also work well together, in order to maintain clear control over the sector.
Dairy farming
The demand for dairy products is increasing worldwide. Rabobank expects consumption growth of 2018% to 1,2% for 1,3. This growth is mainly caused by the population growth in Asia, North Africa and the Middle East. In Europe and North America, milk consumption has been declining for years, mainly due to the aging population.
However, the sector solves this well with the small packaging. These are in line with the increase in single-person households and more frequent eating and drinking on the road. The dairy market is characterized by strong fluctuations in price. This is mainly due to the fact that supply and demand did not always match and the phasing out of intervention options.
This sector should also focus on the fact that the demand for organic products is growing. In addition, animal welfare is becoming increasingly important for consumers.
Beef and pork
The demand for beef is under pressure. However, the sector can resist this through innovations. In addition, sales to non-European countries offer prospects, especially for veal. In the coming years, according to Rabobank, the sector must work on reducing long-distance transport and the use of antibiotics.
Pork consumption within the European Union is stable. Rabobank expects production to grow by 2025% towards 1,5. China and Japan will remain the main sales markets. 2017 is also expected to be an above-average feed profit year. Due to the pig cycle, this is expected to be an average year for 2018.
According to Rabobank, it is important that Dutch pig farming changes from a 'supply market' to a 'demand market'. This is to strengthen, and even maintain, competitiveness.
Ruud Huirne, director of Food & Agri at Rabobank Nederland and Arjan Ausma, sector specialist Arable farming at Rabobank, speaking at the National Economic Agriculture Congress, organized by Boerenbusiness. Register now for this conference.
Kimberly Baker
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