Field crop margin outlook 2024: Tighter margins in the coming year

Between mid-2020 and early 2022, farmers worldwide enjoyed upwardly trending prices for commodities. While commodities prices remain at favorable levels compared to their historical averages, we can’t say the same for costs. Covid-19 lockdowns halted the production of some molecules, which, combined with a few other production issues, led crop protection costs to soar. Following the outbreak of war in Ukraine, fertilizer prices skyrocketed, setting new record highs.

During this period, operating margins decreased slightly, but commodities prices acted as a buffer to hold margins at a reasonable level in 2022. For 2023 and 2024, Rabobank estimates show a continuation of contracted margins, even with the recent decrease in important operating costs. For soybean farmers, the outlook is quite comfortable, as the commodity is likely to achieve good margins in the coming season. However, corn farmers will feel their margins pressured by ample supply, while wheat farmers are unlikely to see improved margins despite declining costs.