Farm profits, up last year, may sink again as farmers’ costs rise
Farm profits, up last year, may sink again as farmers’ costs rise
You’ve probably noticed the rising costs of food in your grocery bill.
The Labor Department reported that food prices were up 7% last month. But the extra dollars you pay aren’t necessarily making it back to the farmers who help keep the shelves stocked.
Ongoing problems in the supply chain have pushed up farmers’ costs, and a wide range of products they use to grow crops are affected, according to Kevin McNew, chief economist at the online marketplace Farmers Business Network.
“That includes seed, that includes chemicals, and it especially includes fertilizer, which is a really key bottom-line item on the budget for farmers,” he said.
Labor and equipment costs are surging, too. This comes after a relatively good year: Prices for commodities like soybeans and corn rose in 2021 and the U.S. Department of Agriculture estimates farm profits grew by 25%.
Those profits are predicted to drop back, said Patrick Westhoff, who directs the Food & Agricultural Policy Research Institute at the University of Missouri.
“Farmers’ costs are probably going to be up more than their receipts are going to be in 2022,” he said.
If crop prices stay high, Westhoff added, that could limit the damage to farmers’ bottom lines.
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