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New Rabobank report recommends efficient use of farm inputs for productivity

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Agribusiness banking specialist Rabobank presents ‘Efficiency with farm inputs – a recipe for productivity’, a report by senior company analyst, Michael Harvey.
The industry report points out that more efficient use of farm inputs including fertilisers, crop protection chemicals, seeds and fuel will be essential for ensuring profitability, driving productivity growth and improving environmental sustainability of farm businesses into the future. It has become imperative for Australian farmers to have in place good purchasing strategies, while focusing on ways to conserve soil nutrients and input use.
Meeting global food demand
Mr Harvey says improved soil nutrient management will be critical to meeting the challenge of feeding the growing global population. Agricultural production volumes will need to increase by more than 70% to meet the challenge of feeding nine billion people by 2050. Though Australia will play a major role as a global food producer, the extent of this role will be determined by the innovation and productivity improvements made by farmers.
Australian market dynamics
Australia relies heavily on global markets for its inputs, which not only makes them a price taker in the market, but creates challenges around seasonality and the long lead times for sourcing products.
Mr Harvey says that this import reliance means farmers not only need to understand what drives the prices they receive for commodities, but also the forces at play in the global input market, as inputs can account for as much as 45% of on-farm working expenses for many enterprises.
He adds that the international marketplace makes it important for farmers to have advanced sourcing strategies in place, so they can make informed decisions about when and how to buy their fertiliser, crop protection chemicals, seed and fuel.
The changing global market
Global input prices are expected to remain above long-term averages, underpinned by the elevated base cost of raw materials. Similarly, oil prices are forecast to remain structurally higher into the medium term, aligned with the high global demand, according to the Rabobank report.
Mr Harvey advises farmers to focus on ways to manage the efficient use of fertiliser, chemicals and fuel on-farm, given that farm input prices are set to remain structurally higher.
Farmers are adopting various strategies to manage fertiliser use including having nutrient budgets and nutrient management plans in place, precision agriculture technologies to pinpoint application and no-till or minimum till cropping.
Farmers’ input use is not only being driven by their relative costs and the need to increase productivity, but increasingly by environmental factors. Mr Harvey says that while there are currently no substitutes for the main nutrients, farmers can take action on-farm to minimise fertiliser use.
By putting a price on carbon, farmers in Australia are being encouraged to transition to a low carbon system and improve efficiency. Additionally, they can take measures to reduce emissions, and increase the efficient use of nitrogen fertilisers.

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