Rabobank’s food and agribusiness research group is recommending that American row crop farmers “transform their businesses” to ensure long-term financial stability during what is predicted to be five more years of low commodity prices and tight margins.
“Given the outlook for tight margins, the fundamental risks facing farmers, and increasing export competition from Brazil, Ukraine, Russia and other growing regions, there is clearly a need for U.S. growers to reinvent themselves,” a report published Thursday said.
Analysts said growers could manage risk and strengthen their financial position by:
*adopting new technology that promotes more efficient nutrient use and greater yields;
*acquiring additional land and planting other types of crops, or shifting a portion of acreage to organic;
*using vertical integration, such as controlling grain storage for greater flexibility in deciding when and where to sell; and
*turning to contract-farming arrangements.
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