ABN AMRO: Farmers and growers remain financially resilient

Dairy farmers, pig farmers, and field crop growers face market prices below their production costs. Yet ABN AMRO considers the agricultural sector financially resilient. Strong years have allowed several sectors to build financial reserves. At the same time, agricultural businesses often postpone major investments. That restraint comes with a downside, according to the bank.

Costs and yields under pressure

The greenhouse sector and fishing industry are feeling the impact of higher energy and fuel prices. ABN AMRO attributes those increases to the war in Iran. Drought and local water availability issues are weighing on open-field crop yields. Permits, conservation policy, and water policy remain sources of uncertainty. The report sets out expected liquidity trends for eight agricultural sectors over the next six months.

Reserves and supply chain agreements

Dairy farming, field crop production, intensive livestock farming, and greenhouse horticulture had financially strong years from 2023 through 2025. Businesses in these sectors built up additional reserves as a result. They could also pay for some investments with their own funds. Limited opportunities to invest also reduced financing pressure.

Greenhouse operators are saving energy and signing long-term contracts. Some of these businesses also produce their own energy. As a result, greenhouse growers are weathering the current energy shock relatively well. Pig and poultry farmers are increasingly participating in supply chain arrangements, ABN AMRO says. That reduces their exposure to market swings and gives them steadier cash flow.

Less room for investment

Permit issues and political uncertainty are holding back major investments. Investment in new barns and upgrades has therefore been limited. Capital spending went mostly toward replacements, machinery, farmland, or a second location. Lower investment and accumulated reserves are improving liquidity and solvency, according to ABN AMRO. That restraint is eroding productivity and the capacity to innovate, the bank says. The delays also hamper efforts to make the sector more sustainable.

Abnamro.nl