Dairy farmers less in the red about April

What is the financial position of the agricultural sector? ABN Amro hopes to provide the answer to that question with the liquidity monitor. The start is with a monitor for dairy farming. It shows an improvement over April. However, it still means that there are red numbers in the current account. 

Compared to the end of 2016, dairy farming is doing significantly better. The livestock farmers thus managed to achieve an improvement of 15.000 euros. On average, this still results in an overdraft of EUR 5.600 on the current account for April. This represents an improvement of 150 euros per dairy cow.

Higher milk price
The improvement follows an increase in the milk price, but the payment of payment entitlements and a supplementary payment also helped. Even the phosphate reduction scheme generated more money through the sale of livestock.

In April last year, the sector was in worse shape than in April 2017, but the difference was smaller compared to the end of 2016. As a result, the improvement compared to April 2016 with 4.500 euros is less significant. A low on the balance sheet was seen between May and November 2016. In November, the overdraft was the largest at 27.000 euros. 

Current account tension
Pierre Berntsen, director of agricultural companies at ABN Amro, takes into account that many companies will continue to feel tension in their current account for the foreseeable future. That has to do with the harvesting activities and the costs associated with it. On the other hand, it is expected that the milk price will improve even further. 'Against the background of the mandatory phosphate reduction, a good milk price is like a plaster on the wound.'  

The monitor is an initiative of ABN Amro, the Ministry of Economic Affairs and Wageningen Economic Research. Together, the companies hope to provide more insight into the balance sheet of agricultural companies. A start will be made on dairy farming, but after that the monitor will also be rolled out in other sectors. 

Herman van den Pol

Herma van den Pol has been with us since 2011 Boerenbusiness and has developed over the years into a market expert Milk & Feed. In addition, she can be seen weekly in the market flash about the dairy market.

h.vandenpol@boerenbusiness. Nl

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