News Drought 2018
Thousands of euros in damage due to drought
A sharp fall in income is expected on arable farms with starch potatoes and on dairy farms. This is apparent from an analysis by Wageningen University & Research (WUR). This decrease is offset by a plus for other arable farms and fruit farms.
At the request of the Ministry of Agriculture, Nature and Food Quality, WUR an analysis of the expected effects of the drought and heat on income in the agricultural sector. This so-called 'quik scan' shows that an average decrease in income of €16.000, €22.000 and €31.000 per unpaid annual work unit can be expected in dairy farming, dairy goat farming and arable farms with starch potatoes, respectively.
High feed costs
When it comes to dairy farming, it is mainly the feed costs that negatively influence the results. Income per unpaid year of work is seen to be almost halved. The average income is €35.500, but in 2018 WUR estimates this at €19.600. The income from the farm decreases from €103.500 in 2017 to €29.100 in 2018. The income is above average, but the feed costs increase from €93.800 in 2017 to €121.700 in 2018.
Pig farmers also have to deal with higher feed costs, higher costs for the sale of manure and higher prices for bedding, but these are not mentioned by WUR. In any case, the costs for the disposal of manure are not included in this.
Esther de Snoo, spokesperson at the LTO representative, told the Stentor: "We do not rule out the possibility that we will still ask for financial support." This will happen after the exact extent of the damage has become apparent in the autumn.
Positive for arable farming
However, it is not all negative, because an increase is expected for the other arable farms and in fruit cultivation. This is a plus of €12.000 for arable farms and €21.000 for fruit-growing companies (per unpaid annual work unit). WUR explains it as follows: "The lower kilo yields are expected to be amply compensated by the sharply higher prices on the free market, as a result of scarcity."
The pluses in income are somewhat nuanced. "The differences between the individual entrepreneurs will be greater than usual." This is due to the differences in soil type, the possibility of irrigation and the nature of the sales contracts. In arable farming, farm income is expected to increase from €24.900 in 2017 to €54.500 in 2018.
Income per unpaid year of work increases to €57.600, compared to €2017 in 25.400. It is a combination of above-average returns, compared with slightly below-average costs. WUR estimates the costs for irrigation at €50 per hectare, for an amount of 25 millimetres.
Clarity in autumn
Only in the autumn can it be said with certainty what the effects of the drought will be. A lot also depends on the amount of precipitation in August and September, and what that will do to crop growth.
Herman van den Pol
© 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.