Farmers are already looking ahead to the 2023 growing season. Some headwinds may mean challenges for next year. Stephen Nicholson is the global sector strategist for grain and oilseeds with Rabobank. While there are concerns ahead, he says the Rabobank experts are still optimistic.
“I will say we’re not as concerned as we were. We’re still optimistic by ‘23. Certainly, when we started off looking at margins, particularly crop margins for 23, we knew input costs were going up and thought it looks like a breakeven year, or maybe we go into the red a little bit, but generally, things look okay.”
He says strong commodity prices late in 2022 are the reason behind more optimism in the year ahead.
“There’s a cost side and a revenue side. The revenue side stayed pretty high, and that created a situation where saw those margins as we go into 2023 and look at price forecasts in ’23, the production margins for corn, wheat, and soybeans were on the positive side, particularly for corn soybeans, and that’s a good thing. Are they as good as ’20, ’21, and ‘22? No, absolutely not, and they are gonna be squeezed, but they’re not going to be negative. I think that’s the good news going forward.”
Looking at next year, he says farmers need to stay vigilant when it comes to marketing opportunities.
“Farmers are going to have to be very conscious not only of their cost side, but they need to be very conscious about their marketing side. And when those opportunities come about to lock in those margins, you need to do it and move on and not worry about going another nickel higher, or is it another one another dime higher? If you can lock in positive margins, do it, and move on.”