Feed sales and profit are lower at Agrifirm

Agrifirm saw its turnover rise in 2021, but its net profit fell. The dividend that flows back to the members remains at a reasonable level. Due to the high raw material prices, the cash flow has dried up considerably. In addition, foreign participations are having a hard time, which has a negative influence on the result.  

Due to increased raw material prices, turnover grew by 5% to €2,3 billion. The net result decreased to €33,9 million, €5,9 million less than in 2020. Of this, €25 million is returned to the members, which is €2 million less than in 2020.

Further feed shrinkage
Underlying, the sales volumes within animal and vegetable are shifting. Agrifirm once again saw the marketed feed volume (compound feed, co-products and premixes) shrink, by more than 400.000 tons to 5,24 million tons. The feed shrinkage is mainly in the co-products. The sales of fertilizers, on the other hand, showed a considerable increase, as did the sales of arable products. Nevertheless, the total sales volume falls below the 6 million tons mark for the first time in years.

The sharply increased raw material prices also affect the cooperative's results. For example, €18 million of the cash flow has dried up to €38,5 million tons. In 2019 this was still almost €100 million. Given that raw material prices rose even faster in early 2022 as a result of the war in Ukraine, cash flow has probably dried up further.

Result of participations negative
Agrifirm's top management sees 2021 as a turbulent year. The disrupted supply chains caused by corona have made the availability of raw materials a major challenge. As a result, feed prices have also risen sharply. This trend will continue in 2022. According to CEO Dick Hordijk, the foreign participations in Brazil and China are having a hard time. The Welkoop stores that Agrifrim operates are performing well. Nevertheless, the overall result of the participating interests is €200.000 negative for the first time in years. This does not include the operations in China and Brazil, which are wholly owned. 

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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