Rabobank: Field Crop Margins Recovering in Europe but Difficult Times in the Americas

St. Louis, Mo. (November 22, 2016) – The latest Rabobank Field Crop Margin Outlook has Europe showing a recovery in margins, Australia’s margins at reasonable levels, but U.S. farmers facing another challenging year in 2017.

“U.S. farmers will face another challenging year in 2017,” says Harry Smit, Senior Analyst Farm Inputs at Rabobank. “Where wheat farmers in the Great Plains area saw a small improvement of margins in 2016, following an exceptionally good yield, the Midwest corn-soy producers saw a continuation of margins too low to cover all costs.”

Rabobank’s latest analysis looks at the specific costs associated with a mix of representative field crops to estimate the gross margins in the following regions: the US (the Great Plains and the Midwest), Brazil (Mato Grosso), France, Poland, the Netherlands and Australia (New South Wales). It provides an overview of the latest developments in field crop margins around the world and an outlook for the coming year. 


In Brazil, a series of years with attractive margins also seems to be coming to an end. Brazilian farmers have been able to prevent margin pressure in 2017 by a lot of forward selling. Now that the two drivers of rising farmgate prices—the global agri commodity boom followed by the weakening of the real—are fading, margin pressure may mount after 2017. Moreover, the general economic situation with difficult access to credit is expected to continue in Brazil. 

Europe, France and Poland are expected to show a recovery in margins in 2017 after a dip in 2016. However, farmers will only experience this improvement once the cash of the new crop comes in, which means not before late 2017 at the earliest. In the Netherlands, the relatively favourable potato prices are expected to result in above-average margins in both 2016 and 2017. 

In Australia, in the absence of extreme weather events, margins—though declining—are expected at reasonable levels in both 2016 and 2017. Field crop farmers are experiencing a relatively long period of attractive yields, caused by an absence of droughts in recent years. This year’s price decline will be partially offset by an above-average yield.

Agri commodity prices and inputs

The outlook for agri commodity prices is relatively flat for 2017. The same goes for exchange rates. As fertiliser supply capacity continues set to outweigh global demand, we forecast fertilizer prices for 2017 to remain depressed and remain around today's level. Overall, fertilizer prices today are about one-third lower than they were on average last year. This means that yield will be the most important factor in projecting farmer margins in 2017.

FAR Report Requests/Media Inquiries

Sarah Kolell
Rabo AgriFinance
(816) 516-7984

About Rabobank International Food & Agribusiness Research and Advisory (FAR)

The Rabobank International Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients’ business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers.

About Rabo AgriFinance

As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that gives producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, input finance and effective risk management products. Rabo AgriFinance is a division of Rabobank Group, the premier bank to the global agriculture industry and one of the world’s largest and safest banks.

About Rabobank

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, and real estate services in more than 40 countries worldwide. Founded over a century ago, Rabobank today is one of the world’s largest banks in the world with over $750 billion in assets. In the Americas, Rabobank is a premier bank to the food, agribusiness and beverage industry, providing sector expertise, strategic counsel and tailored financial solutions to clients across the entire food value chain. Additional information is available on our North America Wholesale Banking website or social media: Twitter & LinkedIn.

About Rabobank, N.A.

Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses, and the agriculture industry. With nearly 120 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees.   

Rabobank, N.A. is a division of Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail, and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world’s largest and safest banks.  www.rabobankamerica.com


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