News liquidity monitor
Financial position of dairy farmer sharply down
The financial position of dairy farms fell sharply in the last quarter of 2020, according to the ABN Amro liquidity monitor. This is partly due to the phosphate rights that were not yet in line with the actual occupancy.
The liquidity of Dutch dairy farmers improved in the third quarter. However, this was not due to operational management, but was mainly due to supporting measures in the corona crisis. To meet entrepreneurs financially due to the corona crisis, RVO paid out 45 percent of the total GLB allowances in July last year. Companies that opted for this received 80% of the allowances as an advance.
This dampened the liquidity decline in the third quarter, but as a result, only 11.000 euros in GLB surcharge was received in December. In the fourth quarter, the average current account fell by more than 10.000 and was negative at 12.000. A major cause of the decline was the phosphate rights that many dairy farmers still had to purchase.
Milk yield
Over the whole of 2020, the milk yield, including supplements, was approximately 37 cents per kilo on average. In 2018 and 2019, the yield was still around 38,5 cents per kilo. It should be noted, however, that the differences between companies are very large as a result of various milk flows, sales markets and the performance of the dairy buyer.
On an annual basis, the difference in the total milk yield was smaller, namely €1000. This has to do with a higher milk production. Looking at the milk yield of the fourth quarter, there is a positive difference of €2.000 compared to the third quarter.
2021
ABN Amro expects a slight improvement in liquidity on dairy farms in the coming months. This is due to the payment of the supplements for grazing in January and the spring costs that will only come in a few months. The pricing of dairy products, on the other hand, remains uncertain due to the corona crisis and limited sales to the catering industry that this entails.
Chanti Oussoren
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