Farming prices across the country are rising due to inflation and Illinois farmers are feeling the repercussions.
Farm prices across Illinois have increased significantly over the past year due to heavy inflation. The Bureau of Labor Statistics reported last week that the Consumer Price index, a leading marker of inflation, rose 7.9% in the past 12 months. In some areas, the cost of fertilizer has increased by 500%.
Julie Stephens, manager for the Illinois Farm Bureau’s Effingham division, said that farmers are feeling inflation in many different ways.
“Whether it be the increased costs of fertilizer or fuel has gone up as well, and that is beginning to affect their costs to produce their crops this year,” Stephens said.
The Bureau of Labor Statistics also reported that the food price index rose 8.6% over the past 12 months, the largest 12-month spike since April 1981.
Due to these high costs, farmers are losing money due to the manufacturers having the final say on pricing.
“The manufacturer is not going to take a hit personally,” Stephens said. “They will increase their costs to make up for any additional input of costs they face.”
The manufacturer setting the price will also hurt farmers’ bottom lines.
“A drastic increase in the price of fertilizer for farmers, ultimately farmers are price takers and not price makers,” Stephens said. “This will definitely be going to affect and impact negatively their bottom lines.”
Agricultural economists at the University of Illinois recently updated crop budgets to reflect higher fertilizer prices as well as the changing price of corn and soybeans, which are the state’s two main crops.
U of I economists anticipate per-acre fertilizer costs will be about $100 an acre higher for corn and $50 an acre higher for soybeans than last year, which is forcing farmers to use just what they need to try and cut costs.
“As we said, those fertilizers are not free, so we have seen farmers only apply the fertilizer that is needed for their fields,” Stephens said.
Stephens also said that she does not expect these prices to return to normal for some time.
This article was originally posted on Illinois farmers struggle with rising costs
Be First to Comment