The Grain Drain After Ukraine: Rabobank’s Ten-year US G&O Outlook

This paper presents some of the major findings of Rabobank’s long-term outlook for the US grain & oilseed market. However, given the war in the Black Sea region, the primary emphasis is on the 2022/23 cycle.

Here are some of the major findings:

• US farm prices were projected to be strong in 2022/23, but the Russia-Ukraine war is likely to push prices above the baseline outlook levels. 
 
• The war will cut global wheat and corn supplies. As a result, US corn and wheat exports will likely increase in at least the current crop year, potentially trimming ending stocks for another year. 
 
• Regardless of the global situation, US planted area is expected to increase in 2022/23. However, US farmland is reaching its agricultural frontier, which may prevent further expansion of major crop production. As a result, strong competition for US acreage will continue.
 
• Soybean planted area needs to expand to meet the expected expansion of crush capacity, while corn and wheat need to find acres to meet increasing export demand stemming from the Russia-Ukraine war.
 
• Domestic demand, primarily from the animal protein sector, is expected to remain robust despite a higher price environment. 
 
• Long-term, national average farm prices are expected to remain higher than the average prices observed in the last decade. 
 
• The expected crop price levels will have varying impacts for row crop producers, processors, grain merchandisers, and food manufacturers.
 
• The analysis presented should not be interpreted as a forecast of the future. The objective of the baseline is to identify long-term trends, given certain conditions and assumptions, plus provide insight into market dynamics based on different scenarios.