Negative cash flow for many arable farmers

Of all agricultural and horticultural sectors, arable farming companies have the smallest percentage of businesses with a positive cash flow in 2025. This is evident from new figures from Wageningen University & Research (WUR) that the institute announced during the presentation of the income estimate. 55% of arable farming companies have a positive cash flow, while the overall figure for agriculture and horticulture is 76%. At 45% of arable farming companies, the income is therefore insufficient to meet payment obligations (including repayments). For the vast majority, doing less maintenance, cutting back on private expenses, or using savings offers a solution. Additionally, 5% of the companies must also postpone their repayments. For 3% of the total, this is not enough, and larger adjustments are necessary. According to arable farming sector expert at WUR, Bert Smit, the year 2025 was characterized by 'great productions with the anticlimax of price formation'. For potatoes, it really has become a disaster, he says. Free potatoes often end up in animal feed, and the prices for grains and sugar are also very low. The seed potato prices have also decreased. The onion prices are an exception, and we hope that remains the case, Smit indicates. The arable farming income has significantly decreased, from €24,000 to €60,000 per unpaid labor year unit (labor that works 2,000 hours or more per year). It is estimated that 20% of the companies have a negative income of -€20,000 or worse. The exception is the starch potato companies where the average income rises from €16,000 to €116,000. 2022 was an exceptional year with an average income of €151,500. For the labor provided, the average of 2025 is not a very high income, according to WUR sector expert Mark Manshanden. He adds that for a larger group, the income is more likely to be below rather than above the average. Particularly small companies are struggling, according to him. And the tax assessment falls within that period and is based on years when things were going very well, so it will probably be quite high. Profitability of arable farming down The profitability for arable farming for the harvest year 2025 is estimated at 91%, which is 7 percentage points lower than in 2024 and 13 percentage points lower than the average in the period from 2020 to 2024. The net operating result for the average arable farming company is in 2025, according to WUR, -€40,200. Last year it was -€7,900, while in previous years there was a positive result of €34,500 (2023) and €79,200 (2022). In this calculation, the worked hours are valued at the collective labor agreement hourly wage including employer costs. Interest is calculated for assets (both debt and equity), so it does not account for the actual interest paid by the companies. The Agro Confidence Index is also declining significantly. In the latest measurement in the third quarter of this year, arable farmers were more negative about their economic business situation for the medium term (two to three years) than a quarter earlier. The index stands at -20 points, while the average since 2013 for arable farming is -3. Disastrous year for potatoes As mentioned, it has been a disastrous year for potatoes. It seemed unstoppable in the European fries processing, and one after another announced their plans to expand production. The thought was that it would become a demand market this year, but sales turned out to be difficult while, in combination with area expansion and good yields, there were many more potatoes. Manshanden indicates that especially China and India are emerging as fries producers. The export outside of Europe is very limited. It was already limited, but the expectation was that we would export and sell more and more, which has been somewhat disappointing. The difference in income between growers who grow on contract and those who have free potatoes is not visible to WUR, but it is clear that this harvest year makes a significant difference for the incomes of potato growers. Much was contracted this year, Manshanden indicates, 'about 80% of the hectares, due to a good price for contracts'. The higher your yield, the more falls outside the contracts, so ultimately about 56% of the potatoes went at contract pricing, and the rest all goes at a free price. We look at the average, and then that contract price counts very strongly, for 56%. But the rest is going for €3, €4. If you as a farmer have to sell completely freely, then you really have a very tough year, Manshanden says. The sector export for arable farming believes that the demand for potatoes will continue to rise and that global production can continue to grow. But there is simply much more competition abroad. Manshanden does not foresee a revival at the end of the season. It may well be that at the very end of the season, it turns out that sales are somewhat better and prices improve a bit. But I would not expect it to become significantly better, because there are just so many potatoes. Little improvement expected next year Smit also has a rather hopeless story for 2026: Little improvement is expected for next year. The sugar and grain stocks are simply high. Cosun has lowered the allocation percentage for sugar beets by 10%. FarmFrites is now trying to break into existing potato contracts, so new ones will also not be as good, Smit indicates. What further raises concerns is the emergence of glass winged cicadas that, according to him, cause huge yield declines in sugar beets, grains, and ground potatoes in southern Germany, and the first infestations have been found in the Netherlands.