Farming demands a lot from farmers in turbulent times

It has been raining almost incessantly since mid-October. If I don't look too closely, I would even dare to say that it rains all the time. For farmers, whose factories and wallets are largely outside, this must be almost daunting. The 2023 harvest has not been harvested in all places and what the prospects are for 2024 is also questionable. There is no shortage of challenge.

The Netherlands has a large livestock herd. The derogation has been abolished, which means that according to the applicable rules there is a surplus of liquid manure. Farmers are overloaded with measures regarding nature conservation, nitrogen, sustainability and more. This results in significant additional costs. Especially for the disposal of liquid manure. Especially now that it is difficult to drive out.

Interest rates significantly higher
Interest rates are another important topic for companies. While an interest rate of 1% to 2% was common a few years ago, it is now between 5% and 6%. For an average company with €1,5 million in debt, this means approximately €35.000 higher financing costs annually. In addition to all these challenges, there are also increasing geopolitical tensions, resulting in all kinds of human suffering. These tensions also have negative consequences for international trade, which is so important for the Dutch agricultural sector.

However, there are certainly bright spots. The milk price increased from €0,34 per liter in 2020 to €0,45 in 2023. The expectation for next summer is around €0,50. Contract prices for consumption potatoes increased from approximately €0,20 per kilo to €0,30 in the same period. The seed potato growers can finally count on good payment prices. Average land prices increased nationally by 2023% in 7,5, to €93.000 for arable land and €71.000 per hectare for grassland. However, it is important to note that there are significant regional differences.

Turbulent times
These are turbulent times for livestock farmers and arable farmers, who face major challenges internationally. The farmers' demonstrations in Brussels last week show that the situation is critical. Yet it appears that awareness is slowly dawning on governments. Louise Fresco, scientist and former president of Wageningen University, recently emphasized that food security can no longer be taken for granted.

The chairman of the European agricultural ministers has indicated that he has 'heard the message'. And Rob de Wijk, director of the The Hague Center for Strategic Studies, emphasizes that the knowledge and innovation that the Netherlands has in food production are unique in the world. He then said that the Dutch farmer, and the entire agricultural sector, is one of the few sectors in Europe that can make a difference.

points of light
It is clear that farming demands a lot from farmers. Both literally and figuratively. Despite this, we must remain hopeful. There are plenty of bright spots, so we continue to fight. After all: behind the clouds the sun always shines.

Peter Pals

Peter Pals is an entrepreneur at Farmers Funding & Advies and grew up on a farm. From his farming heart, he has decided to build up a business for business, financial and tax advice for agricultural entrepreneurs.

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.