The Price of Growing Crops

[gary_in_neenah]

Those in the Agribusiness are facing strong headwinds with the rising cost of fuel and fertilizer for the coming planting season. We have a few members on this forum that are in Agriculture and related business. All of us have a vested interest in the Supply Chain, from the farmer to the food store. What are the thoughts from down on the farm?

 

[mrbb]

well its already NUTS, back in late early Jan, things were almost double , or already past double on many things,
like fertilizer and other chemical and other things, like parts , basic repair wear and tear parts on equipment is thru the roof as well, just doing basic pre season machine PM's has costs WAY up there, simple things like fuel filters have more than doubles in many cases !, going from like 30 bucks to 150 or more on some? I helped replace this Jan! and even worse cannot get parts due to out of stock and NO clue when getting them!
and that was a few months back now, add in this war crap and the BS being throw about driving prices up!

I don;t farm anymore, but I still help friends that do and they update me on things . as I chat with them at times, and the costs for them this year will be an All time record high and then some

the effects will be pretty hard on all come harvest time this up coming fall, might even be a bunch of farmers that cannot even afford to plant this yr, making prices even higher as less crops will be grown!

add in current inflation on prices , and its just beginning to get nuts!
the worst is yet to come, if you ask m!
and it might be a LOT more than many think it will !

 

[dmsrx]

There was a report on the news this morning here in Indianapolis about the cost of fertilizer doubling. They interviewed a farmer who stated he normally budgets 250,000.00 for fertilizer for his 1000 acres. This year he's at 500,000.00.
Makes me worry for my neighbors. They farm just over 10,000. The costs they are facing must be staggering.

 

[old abe]

Those in the Agribusiness are facing strong headwinds with the rising cost of fuel and fertilizer for the coming planting season. We have a few members on this forum that are in Agriculture and related business. All of us have a vested interest in the Food Chain, from the farmer to the food store. What are the thoughts from down on the farm?

It's a very tough game to play now days gary. No way around that being fact. All the way around. Paying for inputs 18 months prior to harvesting the crop, etc. Input cost are 2 to 4 times greater than last year now. I pay different advisory services for information in order to hedge myself on both, costs, and sales, to stay in business. Volatile markets are "High Risk" period. I'm very thankful that we had most of our 22 crop inputs ordered, and covered very early on at much less cost. Not all, but most.

 

[snowfinder]

Those in the Agribusiness are facing strong headwinds with the rising cost of fuel and fertilizer for the coming planting season. We have a few members on this forum that are in Agriculture and related business. All of us have a vested interest in the Supply Chain, from the farmer to the food store. What are the thoughts from down on the farm?

It will be an interesting year for sure. But it always seems that way in ag. I prepaid for a bunch of my fertilizer and chemicals last year for almost twice what I paid the year before. At the time I questioned my move. but now with current world affairs it is looking like it was a good move. On the consumer side I believe there will not be any major food concerns. maybee an empty shelf limiting selection and some higher prices for items, but most farmers are to good at what they do and dedicated to have major issues.

 

[mrbb]

It will be an interesting year for sure. But it always seems that way in ag. I prepaid for a bunch of my fertilizer and chemicals last year for almost twice what I paid the year before. At the time I questioned my move. but now with current world affairs it is looking like it was a good move. On the consumer side I believe there will not be any major food concerns. maybee an empty shelf limiting selection and some higher prices for items, but most farmers are to good at what they do and dedicated to have major issues.

I don't know about farmers being able to make it thru all this, and what may come

larger farms Maybe will be able to absorb the costs, but there are tons of smaller farmers that I think will be struggling if not going under with this current price trends, as many of the smaller one's were barely staying afloat here the past few yrs,

soon to be more farms for sale and gobbled up by developers I think! and once they go that route there gone forever!

 

[favoritos]

I spend a little time in the fields. It's interesting what media reports vs. what is happening. Those little snippets of information are a portion.

Current commodity price is actually dang good if you still have stuff to sell. Carryover inventory is still up in the air, but one of the major players might be out of the game this season. (Big picture people know what that means.)

Input costs are obviously up across the board. Fertilizer is a big one, but not the only one.(It also tends to be cyclical based on production costs.) There are some long term trends related to commodity price that are potentially more dangerous. Land price, including rent, is moving up pretty fast. Those prices generally do not move much in the other direction.

Look at what is happening with car, truck and snowmobile pricing. New farm machinery is on the same trend and good used stuff is really moving. There are big dollars at play in this area. Manufacturing had been throttled down over the past few years to clear out dealer inventory resulting from the junk farm economy. The catch up game is slow and demand is high. Some of the manufacturing quirks are starting to clear. - The same resins were used in tracks, tires, floor mats, and five gallon pails. Chip makers that were still running had moved over to consumer knick knacks instead of GPS guidance systems. (You would be shocked how much used globes are getting right now)

If you like playing the lottery, farming is your game. The odds are changing a bit this year and the price of tickets has gone up. It's tough to not go all in this time. High cost, maybe high reward? If you lose? . . .

 

[timo]

Two professions I'm glad I'm not in today's world,,,, a farmer and a cop.
Much respect

 

[WorkHardPlayHrd]

My husband hates gambling. He said it to me the other day, said I don't know why people do it? I laughed my head off. He goes what? I said this farm is always a gamble. You hate gambling, but you picked it for a career!

 

[mrbb]

My husband hates gambling. He said it to me the other day, said I don't know why people do it? I laughed my head off. He goes what? I said this farm is always a gamble. You hate gambling, but you picked it for a career!

I think all snowmobiler's are gamblers at heart!
just look at how much money we spend HOPING it snows!

 

[billjd]

As the owner of rural Ag banks I can say that input costs are up dramatically. Prices are also good and “if” the input products are available, margins look good. That being said its always the correction that is concerning. When prices come back down operations have to be in a financial position to survive. We have seen this before and land rents did correct although slowly in many cases.

How long this lasts? Everyone gets a guess. Better have some plans and solid team (Agronomist/Banker/Insurance Agent/Accountant-Advisor).