Tight margins for arable farmers here to stay, says Rabobank
© Tim Scrivener Tight margins will persist in 2024 for arable farmers around the world despite some recent reductions in operating costs, according to multinational banking group Rabobank.
It has forecast that wheat margins are unlikely to see much improvement globally, while maize markets will remain under pressure due to a large availability of supply.
Rabobank report author Bruno Fonseca said: “Uncertainty arises from factors such as record crops in Brazil, ‘adequate’ crops in the US and Europe, and expectations of another record Brazilian crop in 2024.”
See also: British Sugar and NFU Sugar strike new price deal
He added that the only certainty was price volatility, given the prevailing market conditions.
In the UK, some grain traders and analysts have hinted at a bearish outlook in early 2024 for arable markets, with UK wheat remaining uncompetitive for export sales.
UK feed wheat futures eased back during November and early December for the May 24 contract.
Wheat plantings
The AHDB’s Early Bird Survey of planting intentions shows a projected fall of 3% in the UK wheat area for harvest 2024.
However, the levy board added that the final planted area may well be lower than the intended area due to the continued wet weather and the difficult early conditions for winter wheat crops.
Traders at Frontier said: “Estimates suggest the UK wheat area could be 15-20% lower than the previous year and this could result in a shortfall that’s unlikely to meet 2024-25 domestic wheat needs.”
There is also talk among industry of higher seed prices due to increased demand for both spring drilling and replanting following the poor autumn window.