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Crop farming could require a transformation

A new RaboBank report suggests row crop farmers will have to transform their operations to stay in business.

Sterling Liddell, senior vice president for Rabo Research, says the industry needs to go through a metamorphosis to deal with current conditions.

“Higher costs of inputs than we’ve ever had, more money required to produce, and tight margins.  So the risk-to-return has changed over what it used to be.”

He tells Brownfield farmers face the dilemma of trying to extend their operations in a tight margin environment, while positioning themselves for growth.

“It’s really (about) stepping back and looking at the business.  How can we go forward?  What are some of the things we can do in the future to be more efficient and expand margin opportunities.”

The report concludes margins will remain tight and export competition will increase, requiring farmers to reinvent themselves.