In its Field Crop Margin Outlook 2027, the agribusiness bank’s RaboResearch division says a global recovery in crop margins is expected to be “delayed and uneven” through 2027, with ample world supplies set to limit sustained price gains for grains and oilseeds, while fertiliser and crop protection costs are forecast to rise again.
“This combination leaves limited scope for broad-based improvements in profitability,” the report says.
RaboResearch notes margin “outcomes will diverge by crop and region”.
For Australian crop margins, the report says the 2027 outlook remains challenging. Elevated fertiliser, diesel and freight costs are expected to continue to keep margins compressed, while an El Niño could weaken seasonal prospects in eastern Australia.
However, favourable conditions across much of southern and western Australia should partly offset margin pressure.
Report co-author, RaboResearch agriculture analyst Oskar Mitchell, said strong yield prospects for crops in Victoria and South Australia – together with above-average production in Western Australia – should spread elevated variable costs over larger volumes.
However, abundant local supply may weigh on farmgate prices and limit the margin benefit of higher yields, Mr Mitchell noted.
“In Queensland and northern New South Wales, below-average rainfall and weaker yield prospects leave margins more exposed to high input costs and may influence next season’s crop mix,” he said.
Mr Mitchell said Australian crop gross margins had entered 2026 “below historical levels”, with commodity prices weighed down by high global grain production, while input costs were lifted by geopolitical disruptions.
