Cost of Farming Rising

first_img“The way farmers pay their labor can vary so much,” he said. “All we can do is look atwhat has happened in the past.” Givan figures labor costs to rise slightly, too, but admitted there isn’t much ground forforecasting. In fact, Givan said the only bright news on farm input costs is that interest ratescurrently aren’t predicted to rise. “The cost of money looks a little flat,” he said. “They have to make up the difference by becoming more efficient,” Givan said. “Theyhave to keep learning to get better yields and lower the cost per unit to keep making aprofit on their crops.” For a long time, he said, prices stayed relatively flat for chemicals, a big part offarmers’ input costs. “Overall, it looks like the cost of farming will go up 2-4 percent next year,” said BillGivan, an economist with the University of Georgia Extension Service. Very little, Givan said. Since only 22 cents of the consumer’s food dollar goes to thefarmer, most changes in food prices aren’t caused on the farm. Farmers don’t controlthe price of their products, either. So they can’t pass their higher costs to theircustomers. The price of everything else, though, seems to be headed up. Actual chemical costs to farmers are hard to predict, though, he said, since the need touse chemicals can vary so much with fluctuating weather and insect populations. “Fuel costs are well above levels of a year ago and will probably ease a little higher,”Givan said. “The price of equipment will likely be up a little, too.”center_img Fertilizer prices are likely to rise, too. How much, though, will depend on events farfrom Georgia. “It depends partially on how much corn is planted in the Midwest andhow much nitrogen is needed,” he said. “But four or five years ago they started rising about 3 percent per year,” Givan said.”It looks like that trend will continue next year, too.” Georgia farmers would love to see their cost of doing business go down a little. They’dbe happy even to see these costs stay the same for a year. But they shouldn’t count onit. What do rising input costs mean to consumers? Some seed costs will probably ease upward, he said, but not all. “Soybean seed isexpected to go up,” Givan said, “but the outlook is for peanut, cotton and corn seedprices to be a little flat.” Most of those costs affect only row-crop production. For livestock and poultry farmers,the main input is the cost of feed. “And right now, feed costs appear to have leveledoff,” he said. Since most farmers borrow at least part of the cost of putting crops into their fields, theprospect of stable lending rates is good news. That’s good news for the folks who raise livestock and chickens. It’s not so good, ofcourse, for the ones who grow the feed.last_img

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