More insolvencies in the agricultural sector expected - Number of low-finance companies to rise by more than 11 percent in three months

The extreme drought has hit many farmers hard and led to significant crop failures. An analysis by the information service provider CRIFBÜRGEL now shows that the consequences of the hot summer have also had a negative impact on the financial strength of agricultural companies. In the period from August to November 2018, the number of agricultural companies at risk of insolvency rose by 11.1 percent. This means that a total of 5,049 agricultural enterprises are currently considered financially weak and currently have  increased risk of insolvency. In the same period, however, an opposite trend is discernible in the economy as a whole. Here the number of companies with a weak credit rating fell by 3.7 percent to 303,025.

"Due to the summer of 2018 and the evaluated data, we expect more insolvencies in agriculture next year. Since the insolvency statistics mainly reflect the past and are a kind of rear view mirror, the heat from 2018 will only have an impact on the insolvency figures in the agricultural sector next year," comments CRIFBÜRGEL Managing Director Ingrid Riehl on the current figures.

Regardless of the development of the last three months, agriculture is generally more financially strong and robust than the economy as a whole, as an evaluation of the financial data shows (as of 19.11.2018). While in agriculture 5.2 percent (5,049 of 87,167 companies) are considered at risk of insolvency, in the overall economy the figure is 8.4 percent (303,025 of 3,583,118 companies). At 2.42, the average credit rating index for agriculture is also better than for the economy as a whole (2.70).