News Liquidity Monitor
Sow farmer loses ground quickly due to corona and AVP
The liquidity of Dutch pig farms decreased in the third quarter of 2020, according to the Liquidity Monitor of ABN Amro. The decrease is mainly due to the position of sow farmers and is due to the corona crisis and African swine fever (ASF).
Pig farms' current account has improved every month since April last year. In March this year, the position rose to a high of €173.000. Since then, there has been a turnaround and the corona crisis has made itself felt. European demand from the catering industry fell away and China also closed its borders to various Dutch slaughterhouses. When ASF struck in Germany, the pig sector was made even more difficult and sales for finishing pigs and piglets were jeopardized.
In the third quarter, liquidity decreased by more than €21.000 to an amount of €115.000. This is the lowest level of this year, but liquidity is still €54.000 higher than in September last year.
Sow farms suffer
Compared to fattening pig farms, the liquidity position of sow farms has lost ground more quickly. The current account fell to €69.000 at the end of September and is therefore just below the level at the beginning of this year, but still above the level of September 2019. The liquidity position of fattening pig farmers, on the other hand, has hardly declined. At the end of September, the average current account stood at €129.000, which is still €47.000 higher than last year.
The difference between the pig farms lies in the piglet prices. In the In the third quarter, piglet prices were on average €22 lower than last year's level. The fattening pig farmers were able to reduce their expenses by using cheaper piglets and maintain their current account.
Uncertain time
Pig farmers are currently living in uncertain times. The situation in the global pig market this year is turbulent. The corona crisis has caused market disruptions and price declines in Europe. The current situation in Germany also has a major impact on the European pig market.
The backlog in slaughterhouses continues to grow because locations are once again affected by corona infections among employees. Now that the infections are also rising rapidly in the Netherlands and there is a second corona wave, the prospects for the pig market in the short term are not very positive.
Chanti Oussoren
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