Production Costs To Keep Rising

Bet this latest Rabobank finding won’t come as a surprise: Crop input prices just keep going up. What does this mean for next year?

The report, “U.S. Crop Inputs,” notes that a lot of attention has focused lately on the run-up in the production of agricultural commodities and its effect on food prices. Additionally, key crop input prices are also rising and show no sign of slowing.

"Farmers’ use of key crop inputs is reaching record highs, while prices are also at record highs, which is putting the pinch on pocketbooks," said Associate Erin FitzPatrick with Rabobank’s Food & Agribusiness Research and Advisory (FAR) department.

During the current planting season, growers have seen a huge increase in the cost of fertilizer — in some case as much as double. Further increases in fertilizer prices will depend on the types and amounts of crops planted.

"How the picture plays out for individual farmers will vary depending on purchase times and location," said FitzPatrick. "Additionally, while 2008 price increases are painful, there would have to be an extreme change in the current marketplace for the price tag on fertilizers to lower in 2009."

Seeds, crop protection products, and farming equipment have also experienced changes that are driving costs up. For example, most key machines are sold out for the season, leaving many growers with higher maintenance and operation costs. "While at first glance it may seem that this equipment shortage is due to what many are calling the ‘Ag Boom,’ that is only part of the story," said FitzPatrick. "There has been a structural shift to fewer farms with larger acreages, which need different types of machinery."

However, larger farms do not automatically equate to economic efficiencies as all growers and suppliers are poised to continue operating along a rising price curve well into 2009. Because of this steady increase in price, FitzPatrick advised that "while average crop farm incomes are at record highs, so too are total debt/equity levels. Farmers are identifying their costs and take profits as the market allows."

Leave a Reply

Latest News
StewardshipOhio Water Quality Project To Determine How Much Phosph…
July 27, 2015
Researchers with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University are looking for farmers in Read More
FertilizerKoch Agronomic Services Launches N-TEGRATION Technology
July 27, 2015
Koch Agronomic Services, LLC (KAS) has launched  N-TEGRATION Technology, a process technology platform designed to enable production of enhanced efficiency fertilizers at Read More
HerbicidesExpert: IARC Herbicide Classifications Leading To Confu…
July 24, 2015
Few people in the crop protection industry had heard of the International Agency for Research on Cancer (IARC) before this Read More
ManagementFCI Trade Summit Update & Precision Tank Turns 50
July 23, 2015
Editors Dave Frabotta and Eric Sfiligoj discuss the upcoming FCI Trade Summit in Las Vegas, NV, and how Precision Tank Read More
Palmer pigweed seedhead in cotton
HerbicidesUSDA Deregulates Dow AgroSciences’ Enlist Cotton Trait
July 23, 2015
The USDA today issued its decision deregulating Dow AgroSciences’ Enlist cotton trait in the U.S. The USDA has now completed its Read More
Industry NewsVerdesian Life Sciences Showcases Versatile Product Por…
July 23, 2015
Technology has revolutionized agriculture by bringing farmers, retailers and distributors to the forefront of the digital age. To meet the Read More
FertilizerWSJ: Cf Industries Exploring Merger With Dutch Chemical…
July 23, 2015
U.S. fertilizer maker CF Industries is in advanced merger talks with Amsterdam-listed chemical company OCI NV, the Wall Street Journal Read More
HerbicidesNufarm Releases New Panther SC Herbicide
July 23, 2015
Nufarm has announced the availability of new Panther SC herbicide. Panther SC is the first liquid formulation of flumioxazin available Read More
EquipmentFarmLink Launches Farm Equipment Sharing Program
July 23, 2015
FarmLink has introduced a new online farm equipment sharing community – MachineryLink Sharing – leveraging this new economy business model Read More
HerbicidesCould The South’s Most Troublesome Weed Represent A Thr…
July 22, 2015
Palmer amaranth is undoubtedly the most troublesome weed in the southern United States, taking a devastating toll on both cotton Read More
Industry NewsH.J. Baker Hires New Director Of International Sales
July 22, 2015
Global Agriculture firm H.J. Baker announced today that Steve Langley has joined the company’s Crop Performance Division and Animal Health Read More
InsecticidesSyngenta Recommends Soybean Scouting To Prevent Economi…
July 22, 2015
Proper soybean insect pest control begins with scouting. As the warm weather continues, Syngenta encourages growers to implement a scouting Read More
Crop InputsH.J. Baker Launches Fall Sulphur Campaign
July 22, 2015
H.J. Baker has launched their “Keep Your Future Green – Use Tiger This Fall and Win Big” campaign. The campaign Read More
Central Valley Ag Randolph, NE
Retail FacilitiesStueve Construction Builds Fifth Facility For Central V…
July 21, 2015
Central Valley Ag partnered with Stueve Construction Co. to successfully design and build its Monroe, Oakland, Wakefield and Royal hub facilities Read More
FertilizerNew Research Could Lead To Less Reliance On Nitrogen, E…
July 21, 2015
Farmers often are required to apply nitrogen fertilizers to their crops to maintain quality and improve yields. Worldwide, farmers used Read More
Seed/BiotechMonsanto Targets Farmers, AFBF In Syngenta Takeover
July 21, 2015
As Monsanto Co. struggles to convince rival Syngenta AG to discuss a potential merger, the seed and agrochemical giant is Read More
CHS Building exterior
Retail FacilitiesSackett Helps CHS Expand Blending Facility, Improve Acc…
July 21, 2015
CHS needed a blend plant that could vastly expand their capabilities in St. Charles, MN. The A.J. Sackett & Sons Read More
Industry NewsH.J. Baker Adds To HR Team
July 21, 2015
H.J. Baker announced today that Barbara Sullivan has joined the company’s executive team as Vice President of Human Resources. Prior Read More