ForFarmers reports drop in profit, feed volume

ForFarmers reports drop in profit, feed volume

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Cooperative cites ‘cautious spending’ due to COVID-19

ForFarmers N.V.’s third quarter gross profit was down 6.8% due to a decline in feed volume, the cooperative reported.

Total feed volume was down 2.8%, while compound feed volume was down 3.7%. The cooperative said lower operating expenses could not compensate for gross profit decline.

“Volumes in the third quarter were lower than in the same period last year, when there were no COVID-19 measures and the ‘stoppers arrangement’ for pig farmers in the Netherlands had, for instance, not yet been put into effect,” said CEO Yoram Knoop. “However, compared to the second quarter, when the coronavirus impacted all, volumes increased somewhat. As of March, it has certainly not been an easy time for farmers, who saw both their markets decline and prices for their products come under pressure. It remains to be seen how long COVID-19 will still lead to drastic measures. Farmers, consumers and companies remain cautious in their spending.”

ForFarmers said it has implemented the first phase of its efficiency plan, with EUR7 million in cost savings. The full effect of the savings will be visible in 2023, it said.

“In our recently presented strategy Build to Grow 2025, we indicated that we will definitely continue to invest in innovative concepts and solutions, which will help our customers achieve better returns especially in changing market circumstances,” Knoop said. “That is why cost efficiency and scale are essential. We are therefore making the next step in enhancing the efficiency of our organization.”

ForFarmers announced in October that it had acquired Dutch poultry feed company De Hoop Mengvoeders, in a deal it says will allow it to focus on feed quality and advice for poultry farmers.

“I am of course tremendously pleased with the acquisition of De Hoop Mengvoeders,” Knoop said. “We are creating a leading player in the Dutch poultry market, focusing on delivering the best feed and the best advice.”