U.S. Farming Economic Outlook Discusses the Challenging Times
St. Louis, Mo. (Dec. 4, 2017) – Although there are some indications that the row crop economy has reached its lowest point, producers should still anticipate challenges over the next several growing seasons and be prepared to transform their business models. This is the main message provided in a new report from the RaboResearch Food and & Agribusiness group, whose analysts take a deep look at the potential recovery of the row crop economy and strategies for increased success.
Rabobank’s farm economics baseline outlook discusses fundamental risks growers face each day. These risks include: operational, business continuity, regulatory, environmental, product and financial.
“Given the outlook for tight margins, coupled with fundamental risks facing farmers such as increasing export competition there is clearly a need to reinvent the industry,” explains RaboResearch Food & Agribusiness, Senior Farm Inputs Analyst Ken Zuckerberg. The report finds four strategic options producers could consider to better prepare for the expected low growth and returns.
“Since the downturn began in 2013, profitability on an individual farm basis has been largely dependent on land ownership,” notes RaboResearch Food & Agribusiness, Global Data Analyst Sterling Liddell. “Growers who farm on owned land generally producing greater profits compared to farmers operating on cash-rented or share-rented land.”
It is critical for producers to act appropriately and potentially transform business models to remain resilient.
A full copy of the report, “A Time to Evolve: Farming Strategies for a Challenging Ag Economic Environment,” is available to Rabobank clients and journalists.
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About Rabobank International RaboResearch Food & Agribusiness
Rabobank International RaboResearch Food & Agribusiness 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.