"Sticker Shock" Is Much Less Of A Concern For Neighbors

When it comes to holding costs in line, you’ve already got an edge on neighbors who use excessive tillage.

You've probably already faced sticker shock concerns when you projected what will definitely be considerably higher crop production costs this year. Fuel, fertilizer, chemicals, seed, seed traits and machinery will all cost more in 2005 due to higher energy and steel prices, reduced manufacturing plant capacities and other factors.

In fact, Gary Schnitkey expects your variable costs to rise by $6 to $9 per acre for corn and by $4 to $5 per acre for soybeans this year. As a result, the University of Illinois ag economist expects net farm returns for 2005 to look more like what you earned in the late 1990s rather than during the last couple of years.

Here’s what you can expect to pay in several key crop categories during the coming months.

Energy Prices: Expect diesel prices to be 30 percent higher this spring than a year ago, and you might feel the impact even more dramatically if you’re irrigating. For instance, growers around Amarillo, Texas, have seen the average per-acre cost for energy to irrigate an acre of corn soar from $80 to $140 per acre in just 2 years, says Texas A&M extension worker Steve Amosson.

Natural gas prices have climbed above $6 per million BTUs compared to only $2.50 to $3 just 3 year ago. This price increase directly impacts the cost of fertilizers, ag chemicals and natural gas and propane for crop drying.

Chemical Costs: Figure on at least a 5 percent increase in ag chemical costs this year.

Fertilizer…

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Frank Lessiter

Frank Lessiter has served as editor of No-Till Farmer since the publication was launched in November of 1972. Raised on a six-generation Michigan Centennial Farm, he has spent his entire career in agricultural journalism. Lessiter is a dairy science graduate from Michigan State University.

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