Sow farmer can't straighten balance yet

The current account position of Dutch pig farms increased by €2019 in the second quarter of 27.000. This means that in June there was an average of €14.400 in the account, according to the Liquidity Monitor of ABN Amro and Wageningen Economic Research (WUR). 

The improved results are mainly due to the fact that both the price of piglets and the price of pork have risen considerably. In addition, feed costs were 5% lower in the second quarter, compared to the first quarter. The increased piglet prices resulted in a significant yield improvement at sow farms, although at the same time it led to an increase in costs at fattening pig farms. As a result, sow farms in particular have benefited from the favorable market.

Still red numbers
The current account position of Dutch sow farms increased by more than €2019 in the second quarter of 40.000. However, this increase has not been able to ensure that black numbers are written again, because the current account position on sow farms is worth €43.000 at the end of June negative† The main reason for the improvement in the position is the improving piglet prices. In contrast, the number of sows in both the Netherlands and Germany is declining. 

The increase in the current account position is expected to level off again for the second half of the year. This is partly due to the fact that the selling prices for piglets are generally lower in that period. The fall in the feed price has also ended, which means that it is expected to rise again slightly in the coming months.

The current account position of fattening pig farmers has also increased, but much less strongly than on the sow farms. This increased by approximately €3.000 to more than €26.000. The current account position is therefore still almost €4.000 lower than in June last year. The increase is mainly caused by the higher sales prices for finishing pigs, which goes hand in hand with increased purchase prices for the piglets, such as reports ABM Amro in its report. 

Favorable expectations
The bank expects the market to recover further in the second half of the year. For example, it is expected that the shortages in China (as a result of African swine fever) will become more visible. According to ABN Amro, this is because the shrinkage of the Chinese sow herd will lead to a decrease in meat production in a few months' time. The United States is expected to play a minor role as an exporter, as a result of the ongoing trade war. According to the bank, this will have a positive effect on European exporters.

Kimberly Baker

Kimberly Bakker is an all-round editor at Boerenbusiness. She also has an eye for the social media channels of Boerenbusiness.

k.baker @boerenbusiness. Nl

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