Analysis Countus Arable Farm Index
Arable farming markets show solid price level
The level of the Countus Arable Farm Index shows a stable and high level for September. This is based on pricing. In that month, the sector barometer was able to further strengthen its position. To what extent does the Index reflect reality?
At the end of August (week 35), the Countus Arable Farm Index broke through the 150-point mark; that happened since 2004 2 times earlier. In September, the Index maintains its upward trend, with a striking stable development. In 3 of the 4 weeks, a rate of 153 points was maintained. In anticipation: this level will also be used at the beginning of October.
Stable prices
Of the 5 arable crops in the Index, excluding sugar beet, 3 show a stable price trend. This explains the hardly changed figure of the Index. Bintje's seed potato price has been unchanged since August, but it hardly plays a role in the formation of the Index anymore.
153
points
At the beginning of September, the April 2019 contract in the potato futures market had a small rebound. Between September 18 and September 21, the price peaked at around €31 per 100 kilos, before moving back to around €30. The EU feed wheat price also maintains €20 per 100 kilos as a stable base.
The Emmeloord fair price for seed onions 30% to 60% fluctuated, however. At the beginning of September, €1,50 per 100 kilos was added and at the beginning of October the price level rose by €3,50. However, this last increase has not been included in the current figures.
Revenue figures
Statistics Netherlands has published the preliminary yield figures for the first crop (wheat). These are about 500.000 tons below the 2017 level; the acreage has therefore decreased by 3.500 hectares. The drought has according to Statistics Netherlands had little influence on grain yields.
For the other crops, it will take until the end of October before Statistics Netherlands will issue a preliminary harvest estimate. It is certain that the kilos of potatoes, onions and sugar beets will be disappointing. At the moment, the Index is still calculating with the high crop yields of 2017. For onions, an additional factor is that the quotation of 30% to 60% is not realistic for all parties.
Practice vs Arable Farm Index
Anyone looking at the Arable Farming Index without knowing the background can only conclude that the Dutch arable sector is experiencing peak times. Nothing could be further from the truth. The (free) price level is only feasible for a very small group. Even the high potato and onion prices cannot compensate for the lower yield everywhere. The situation is therefore very divided. We will probably continue to see that picture in the coming months.
Niels van der Boom
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