Farmers are concerned about rising ag input costs


Farmers are concerned about rising ag input costs

Farmers are becoming increasingly concerned about rising ag input costs, according to the latest Ag Economy Barometer.

Purdue University’s Jim Mintert say “there were a noticeably number of farmers who said they expect to see some pretty rapid increase in farm input prices. To put some numbers behind that, 39 percent of the producers in our survey, so almost 4 out of 10 said that they expect farm input price inflation to be 8 percent or higher in upcoming 12 months.”

Audio: Jim Mintert

For the third month in a row, the survey asked farmers for their expectations about farm input price changes in the next year. In June and July, thirty percent of producers said they anticipated farm input price inflation to be 8 percent or higher.

He says that’s four times or more the rate of average inflation in input prices over the last decade.

“People are concerned what’s going on with (ag input) costs,” he says. “They know the costs are going up and are already seeing some of those; they’re worried it’s going to increase much more than they’ve observed in the recent past; and I think they’re worried about the potential squeeze it could put on their margins in 2022.”

Eastern Nebraska farmer Quentin Connealy says now is the time to secure ag inputs.

“You might want to start locking in some of that stuff and watching and pricing some of that stuff out and making sure your balance sheets are looking good because input prices on fertilizer are skyrocketing and looking like it might reach some scary numbers,” he says. 

He tells Brownfield “we locked in some fuel last week because as we get closer to harvest here it’s bound to go up to.”

The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. farmers.