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RaboBank forecasting continued tight margins in 2017

There’s more data suggesting margins will remain tight for Midwest crop farmers in 2017.

RaboBank grain and oilseed analyst Steve Nicholson says their latest Field Crop Margin Outlook calls for continued financial struggles for many corn, soybean and wheat producers.

“Just start ticking down the crop inputs and all the challenges in different areas.  Probably one of the bright spots if you’re a producer having to buy inputs (is) fertilizer has been a bit of a happy thing.”

He says adequate supplies of fertilizer have kept pressure on prices.

However, the cost of seed has been slow to come down.

“There’s some pretty good discounts, but in talking to some seed people recently it’s been difficult to get producers to bite the bullet and get their seed needs done.”

Nicholson tells Brownfield land rental rates are also worth scrutinizing when planning for next year.

“We’ve seen people talk about these flex lease arrangements and all the different ways those might come to fruition to make that land cash rent a little more responsive to what the market is doing.”

RaboBank analyzed specific costs associated with a mix of representative field crops to estimate the gross margins in various parts of the U.S. and abroad.

The report suggests margins will remain tight and commodity prices relatively flat in 2017.