'Income pig farmer greatly improved'

The pig farms made significant progress in terms of liquidity in 2019. This is apparent from the liquidity monitor published by ABN, together with Wageningen Economic Research (WUR).

In December, the average pig farm's current account peaked at €81.000. This is significantly higher than in December 2018, when it was still negative at €7.000. Halfway through 2019, the average current account turned positive again. The reason for the rapid increase is the greater demand for pork from China. Pig prices benefited greatly from this. The outbreaks of African swine fever (ASF) have cut the Chinese pig population in half. 

In addition to the better income, expenditure was also higher last year than in 2018. This is due to the slightly higher feed costs and the purchase of 'expensive' piglets. In addition, pig farms have spent money on investments and this obviously affects the incoming and outgoing cash flow as well.

Situation on sow and fattening pig farms
The average current account position on the sow farms has also strongly improved, although it was still negative in December. Namely €45.000 in the red. This is considerably better than in 2018. When the average was still €88.000 in the minus. 

Thanks to the higher prices for finishing pigs in 2019, the position of the average finishing pig farm has also increased in 54.600. In December, the average current account position was €2018. A sharp increase compared to December 17.800, when it was €XNUMX.

Positive expectations
ABN Amro has positive expectations for the return in 2020. It is suspected that favorable market conditions will prevail in the coming years and that positive liquidity developments will take place.

As long as the Netherlands remains free of the AVP, it is to be expected that the market price for piglets and finishing pigs will remain at a high level. This is because it is assumed that the good sales opportunities for pork in China will continue. It is not yet possible to estimate what impact the coronavirus outbreak will have. 

Chanti Oussoren

Editor at Boerenbusiness who studies the dairy, pig (meat) and feed markets.

c.oussoren@boerenbusiness. Nl

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