News Liquidity monitor ABN Amro
Meat pig farmer suffers a lot from the corona crisis
The liquidity position of pig farms fell sharply in the second quarter, according to the liquidity monitor that ABN Amro has drawn up together with Wageningen Economic Research. The financial position of fattening pig farms has fallen sharply, while sow farms still got off to a good start this quarter.
The pig farm's current account position in the second quarter amounts to an average of €134.000. As a result, the position has declined by €30.000 compared to the first quarter, but is still almost €100.000 higher than last year.
The decrease is due to the consequences of the corona crisis. The decline in slaughter capacity due to the closure of slaughterhouses due to corona infections, and the export ban that some slaughterhouses are struggling with, have caused pig prices to fall. Since the beginning of March, prices have fallen by a third, affecting the liquidity position of pig farmers.
Fattening pig farms
Fattening pig farms are in less good shape in the second quarter than in the first quarter. At the end of June, the current account position stood at €126.000, a decrease of €39.000 compared to the first quarter. However, the fattening pig farmers maintain a strongly improved position compared to last year and the level is more than €62.000 higher.
Where the position of the fattening pig farms has decreased, the position of the sow farms has improved slightly. The piglet trade later had to suffer from the corona crisis, which is why the decrease in liquidity position is not yet visible. Sales opportunities in the Netherlands and abroad are now under pressure due to the difficult sale of finishing pigs.
Perspective
The current price drop is significant, but the buffers that have been built up mean that the situation is not yet dramatic. Provided that global slaughter processes and sales opportunities recover, and there are no trade barriers or restrictions from the corona crisis, the prospects for the pig market are favourable.
Chanti Oussoren
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