Economists expect row crop production expenses to increase in 2023
A recent report published by the University of Illinois indicates farmers can expect input costs for corn and soybeans to increase in 2023. This comes as many row crop farmers are still in shock over higher input costs in 2022.
The report was written by Gary Schnitkey, Krista Swanson, and Jim Baltz at the Department of Agricultural and Consumer Economics at the University of Illinois. Carl Zulauf with the Department of Agricultural, Environmental and Development Economics at Ohio State University also contributed to the report.
One excerpt from the report includes:
“Most costs are projected to increase. Inflation is prevalent across the entire U.S. economy. Interest rates, energy prices, and wage rates continue to increase, and supply issues that began in Covid have not been resolved. The Ukraine-Russia war has further clouded the outlook and worsened supply chain issues.”
The immediate question almost every farmer has is “will this situation impact profitability?”
The report concludes:
“At projected cost levels, per bushel prices of $5.30 for corn and $12.75 for soybeans result in marginal profitability, similar to levels experienced from 2014 to 2019. Projections are for a return to much lower profits in 2023, continuing a pattern of rising and falling farm incomes. Periods of high net incomes are following by less profitable periods which often persists for several years."
For 2023, various input costs for corn and soybeans may include:
Fertilizer prices increase from $200 to $250 per acre
Pesticides prices increase from $99 to $108 per acre
Seed prices increase from $120 to $130 per acre
Hired labor costs increase from $25 to $27 per acre
Total non-land input costs are expected to rise from $758 to $860 per acre
NOTE - Data is the forecast for farms in Northern Illinois
The full report may be found here>>