The food industry is vulnerable to climate change. Producers will need to adapt to climate change if they, and the communities dependent on them, are to remain viable. There are essentially two ways to adapt—incrementally and transformationally. We differentiate between incremental and transformative adaptation mostly on the basis of the size of the change needed. Here, we studied the Australian peanut industry, which is already experiencing the effects of climate change. We expand on the notion of adaptive capacity and refer to ‘transformational capacity’ and test its association with resource dependency. Resource dependency is a measure of the interactions that primary producers have with a natural resource and includes factors such as occupational identity, networks, resource use as well as a range of financial factors. We hypothesized that some primary producers were more likely to demonstrate higher levels of transformational capacity if they possessed lower levels of resource dependency. We surveyed, by phone, 69 farmers representing 87 % of the peanut industry in northern Australia. Our results show that the capacity to transform depends upon individual's networks, their employability, tendency for strategic thinking and planning, business profitability, local knowledge, environmental awareness, use of irrigation and use of climate technology. Barriers to transformational change were occupational identity, place attachment and dependents. Our study is one of the first to focus on transformational capacity. This approach allows us to understand why some individuals are better able to adapt to change than others and also to assist industry and community leaders to develop broad-scale strategies.