The Department of Agriculture is projecting a farm income boost for 2021, but growers are looking ahead to 2022 and worried about the role rising input costs will play in their bottom lines.

USDA’s Economic Research Service recently released its December farm income projections, which have net farm income jumping about 23.2% in 2021 to $116.8 billion, the largest amount since 2013 and 24.2% above the 2000-2020 average when prior years are adjusted for inflation.

“A lot of commodity prices are up; whether that really is benefitting the producer kind of depends on how you look at the input costs,” American Farm Bureau Federation Chief Economist Roger Cryan told Agri-Pulse in November in advance of USDA’s report.

“We have a lot of supply chain issues causing higher fertilizer prices, causing difficulties in getting machinery – and nobody’s getting a discount on machinery – a lot of costs are rising, and there’s a lot of uncertainty associated with inflation besides the supply chain issues,” he said.

For its part, ERS projected 2021 total production expenses – a figure that includes owner dwelling expenses – to jump 8.3% to $387.6 billion. But farmers are worried that figure will only go up as the costs of fertilizer, pesticide and other inputs continue to rise.

“Fertilizer inputs are incredibly high right now; seed, chemical, if we can get them, they’re high,” American Soybean Association President Kevin Scott said in an interview with Agri-Pulse.

Chris Edgington, president of the National Corn Growers Association, has the same concerns. He said input prices are having agronomic impacts as producers look for less input-intensive crops like soybeans or wheat. Growers are also looking at slim reductions to fertilizer applications with the hopes of favorable weather lessening the need for next year’s use.

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“We shoot for using seven-tenths to nine-tenths of a pound of (nitrogen) to get a bushel of corn, we might be switching to six-tenths to eight-tenths to try and stretch the dollars a little further and see what we can get,” Edgington said.

Prices may be rising, but Corey Rosenbusch, president and CEO of The Fertilizer Institute, said he expects fertilizer to be available for producers looking to apply it. Speaking on Agri-Pulse Open Mic, he said “everyone that I have spoken to about supply do not see a sky is falling scenario.”

The timing of the price fluctuations also hit many farmers as they were making 2022 growing season choices like what to grow and how to grow it. Whether or not those decisions hold true once farmers have a better idea of costs and weather outlooks, Edgington says he still expects to grow a crop in 2022 and anticipates other growers will do the same.

“There’s a lot of decisions being contemplated each day, and this fall is a big time for a lot of that as guys prepare,” he said. “But when we get all done at the end of next spring, crops are going to be planted, acres are going to be covered, and we’ll see how that all shakes out.”

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