Even though farm income has gone up, agriculture expenses have also been on the rise. Economist Mike Doherty says we’ve had year after year of price increases.
“Just in the last 12 months in almost all of your fertilizer categories. For corn, you’re talking about nitrogen but also DAP your diammonium phosphate and those products. Those input costs for corn and beans have gone up somewhere between 50 to 80% in the last 12 months,” he said. “On the other hand, relative to prices, we had high prices back in 2011, 2012 and going into 2013, and back then the input costs were actually even higher than what we’re experiencing now.”
Doherty explained that he’s still uncertain what’s going to happen next year. “Where we’re really nervous is not just how much they’ve gone up this year, but what are we in for, for input costs next year and particularly if you combine those input cost increases with increased seed costs and the seed costs are expected to go up quite a bit going into 2022 and then you throw on top of it landlords you know asking for a 5 or 10% increase, especially in cash rent. These are really going to add up and they’re going to narrow the profit margin next year.”
Doherty reminds farmers that the price of a new building has significantly increased over the past year or so due to lumber prices.
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