Farm Credit

Production Costs Outpacing Commodity Prices

Dan Economy

commodity prices
Image by David Mark from Pixabay

The cost of growing crops could outpace revenue for many farmers this year, making it more difficult to break even despite rising commodity prices and increasing domestic and global demand.

An American Farm Bureau Market Intel Report says that farm production costs are likely to rise six percent in 2022, which follows a 12 percent rise in 2021. This continues a trend stretching back several years, as farmers have seen almost all production expenses rise since 2013.

Production cost increases include rising fertilizer, seed, and chemical prices that now make up 17.5 percent of on-farm expenditures; rising fuel and energy prices that are made worse by the Russia-Ukraine conflict; increasing costs of labor for both farmers and agribusinesses; COVID-19 disruptions of labor markets and production.


“Right now, there are serious concerns about whether farmers will be able to access the supplies they need to put a crop in the ground,” says AFBF President Zippy Duvall.

(From the National Association of Farm Broadcasters)