(Lakefield, Mn.)– The likelihood of a substantial increase in costs for seed, fertilizer and chemicals is sparking a lot of concern in the agricultural community. Jim Nesseth of Extended Ag Services in Lakefield says producers are bracing for what that could mean when it comes to profits…
“You know bottom line I really expect these costs to, you know, compared to last year, to be $200 to $300 an acre higher and that’s really going to put the drive, the break even prices are just going to be higher, you know. And you can just estimate possibly some $12 break even on soybeans and five dollars on corn, and when you think about that, that’s a pretty good price to be able to maintain that. So it all depends on yield and what your break evens are, and so that will drive everything. But bottom line is it just seems like it’s going to be a real challenging year next year with these higher input costs.”
Nesseth says it’s somewhat debatable if the increases can be pinned on supply chain issues…
“They claim that, Steve, and there probably is some truth to that but it just seems like, you know, when there’s some real good profitability like there’s probably been this past year for our producers it just seems like everybody wants a piece of the action and so whether these are rural supply issue concerns or there’s some bottleneck in that supply chain system, it very well could be, but in other cases, you know, you always suspect that it could be a little bit artificially made, too. It’s just the way this thing works and we’ve seen this in the past.”
Nesseth says it spells out the importance of producers being even more prudent and being careful on spending for the upcoming year.
