ABN Amro sees more money in dairy farming

Dairy farmers were able to further improve their cash position in the first quarter of 2018. This is apparent from the 'Liquidity barometer dairy farming first quarter 2018', compiled by ABN Amro. The bank reports that the fall in the milk price has had only limited negative consequences. 

Dairy farmers saw the current account position increase by an average of €2018 in the first quarter of 6.000. This yields an average amount of €14.500. Compared to 1 year earlier, this results in a plus of €20.000 (converted €200 per dairy cow), so calculated ABN Amro† However, compared to the last quarter of 2017, the increase is lower.

Milk price is decreasing
The fact that the result is lower, compared to the end of 2017, has everything to do with the milk price. It has shown a downward trend since the beginning of 2018. However, the price is still higher than in the first 3 months of 2017. It is something that gave dairy farmers the opportunity to repay more, but at the same time more tax was paid. The extra payments in January (for example for grazing and sustainability) compensated somewhat for the fall in the milk price.

There is also a decline in investment. "Despite the fact that a number of entrepreneurs invested in phosphate rights, the average investments were lower." Less savings were also withdrawn. 

ABN Amro says that the results on the current account have been positive again since October, but that it has not yet offered enough room to build up a buffer. The cost price in particular determines the level of the required buffer. Behind the scenes, the bank is working to gain more flexibility for repaying loans. 

Morally less good?
In general, the bank states that the first quarter was not 'disappointing' in terms of liquidity. However, it says nothing about the morale among dairy farmers. After all, they have had a lot to do with them in recent weeks, such as a new vision on land-relatedness and the announced route to added value for FrieslandCampina. 

"You could say from 'more to better'. That takes some getting used to for many dairy farmers, but the basis is still strong. The joint efforts to achieve the derogation have been rewarded and Dutch dairy is a product of world fame," according to the bank. .ABN Amro reports that dairy farmers managed to improve their cash position.

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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