Agricultural volumes are declining, but prices are higher

Prices for arable farming, poultry and pig farming products will remain at a relatively high level for the rest of this year, ABN Amro expects. In a new sector forecast, the bank states that it expects volumes in the sector to decline by 1,5% this year and by 3% next year.

Various developments are mentioned that are causing volumes to decline. For example, the switch to the Better Life quality mark has resulted in a decrease in the number of broiler chickens kept and the number of pigs is shrinking due to buyout schemes. In arable farming, volumes are under pressure due to the heavy rain, which means that sowing and planting is delayed and sometimes fails. In greenhouse cultivation, volumes are increasing because energy prices have fallen again.

Lower supply and high demand
The lower supply in combination with continued high demand means that the bank expects prices to remain high this year. According to the forecast, milk prices will be slightly higher than last year, while costs are lower. "Fertilizer prices are back at a reasonable level and feed costs are also lower than two years ago," the bank said. "However, due to the wet spring, the costs and the run-up to the end of the derogation for manure sales have risen considerably and the higher interest rates mean higher financing costs."

Demand for labor lower
The agricultural and horticultural sector is struggling with an aging population, but the demand for labor is also declining because the contraction will continue in the coming years as a result of purchasing schemes and sustainability tasks, the bank says. Further automation and robotization also results in lower labor demand. According to the bank, the sector is faced with competition for workers from Central and Eastern European countries and a moderate attractiveness for employees.

Linda van Eekeres

Linda van Eekeres is co-writing editor-in-chief. She mainly focuses on macro-economic developments and the influence of politics on the agricultural sector.

l.vaneekeres@boerenbusiness. Nl

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