News Rabobank quarterly report
2021 and 2022 growth forecast for agricultural sector 0,5%
The Dutch economy is expected to grow by 4,2% this year and 2022% in 3,7. There are major differences between regions and sectors. The growth forecast within the agricultural sector is 0,5% both this year and next. In 2020, the sector grew by 0,4%. Rabobank economists report this in their published today quarterly studies.
In the second quarter of this year, the Dutch economy grew by 3,1%. Unexpectedly hard, according to Rabobank analysts. The economic recovery in our country is stronger than in other European countries. GDP in the third quarter is expected to be above that of before the corona crisis. Almost all business sectors are expected to fully recover from the corona crisis by 2022 at the latest.
According to the analysts, the rise in inflation is temporary and will remain contained. The bank states that the announced phasing out of the generic support measures is 'responsible and logical, especially in combination with the particularly tight labor market'.
Shrinkage in arable farming
In a revenue forecast, the analysts also zoom in further on developments within the agricultural sector. This shows that there are significant differences. For example, the turnover of arable farming is expected to shrink by -2021% in 1 and the turnover of land-based livestock farming is expected to increase by 4%. It is expected that in 2022 the turnover of this will be the only part to decrease next year, by -2% (see table below).
Stable milk prices expected
The prices of basic dairy products are under slight pressure this quarter, but Rabobank expects a stable level for farm milk prices in the coming period. Higher general costs, more expensive concentrates and regionally lower quality of roughage somewhat nullify the yield due to the higher milk price.
Declining import demand for pork in China
The Chinese pork price is a strong determining factor for producers in the EU, the analysts say. Pork imports from China are still high, but there is a downward trend. Due to the ample supply, the pork price has now fallen. In combination with the high feed price, the pressure on margins has increased.
Opening catering industry good for veal sales
Wider opening of the food service in Europe has boosted the sale of veal. Supply management also contributed to an improvement in selling prices. Barns that become empty are populated more quickly. Sentiment in the sector is more positive. This does not alter the fact that the increased feed costs and the higher price of the sober calves are depressing the return, according to the analysts.
Other livestock prices remain positive
Supply control and sustained demand ensure that price formation in other livestock sectors (dairy goats, rabbits, horses) remains positive. The increased costs, especially of feed, are disadvantageous.
Concerns about rising costs of horticulture and arable farming
Demand for most products in the vegetable, fruit, flower and plant sector will remain at a good level in 2021, but costs will rise. Concerns are growing about increasing costs of energy, fertilizers, crop protection and packaging. The limited availability of labor also remains challenging in all horticultural sectors.
Expectations for laying poultry moderate
For laying poultry, the bank's expectations for the coming period are moderate. The demand for eggs remains at the same level, but feed prices will remain high for the time being, which is putting pressure on margins. The product range will become more sustainable and increasingly focused on regional sales.
Rabobank expects the market for poultry meat to improve in the coming period as demand picks up. High feed costs mean even lower balances in the short term. As a result, the conditions remain challenging.
Linda van Eekeres
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