Analysis arable index
Arable farming index takes huge spurt
The various arable markets, which together form the Countus Arable Farm Index, have shown a strong growth spurt in the past period. This explosive increase was last seen in early 2014.
All products in the Countus arable index included, show a price increase. This is due to the drought. In addition, the price level could hardly fall any further; an example of this is an onion quotation of €3 and a wheat quotation of €178 per tonne. Since the beginning of July, there has been music in the Index again.
Rare Rise
Week after week the figure bounced from 102,60 in week 27 to 139,20 in week 31. At 15,20 points, the increase between weeks 29 and 30 is very significant. It is not often that the Index shows an increase week after week.
15,2
points
The EU feed wheat price creates an important floor in the Index. With a price level above €200 per tonne, the Index can benefit from significantly higher values. If we look purely at prices, the price of Bintje 35 to 45 millimeters is the highest (€51 per 100 kilos on 1 August). Since the share is very small in terms of acreage, this increase is only a minor factor. At the end of June, this price was still €29 per 100 kilos.
Taking advantage
The April contract on the potato futures market shows a more erratic picture. In the previous month it was single-handed responsible for an increase. A price of €31,20 per 100 kilos is the highest level the April contract has seen in July. Partly due to the increasing area of consumption potatoes, the interest in the Arable Farming Index is increasing. However, the question is how much the arable sector can benefit from this price level.
The first seed onion listing in Emmeloord was published on 1 August. This makes it too late for the July Index. The price level of €18,50 per 100 kilos for 30% coarse is considerably higher than the €3, which was concluded last season. In July, the Index averages between the two levels. An increase is therefore included.
Financial return
Earlier we showed that the end of July is important for the barometer. A positive outcome is usually guaranteed if the Index is positive. This year the road has gone up. However, with low yields on the horizon and a small free market (for potatoes), it remains to be seen whether the Index can actually accurately reflect the financial returns of arable farmers. This varies greatly from company to company.
Niels van der Boom
© 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.