Seed, feed and interest costs aren't the only higher costs farmers are likely to face next year, warns Carl Zulauf, Ohio State University economist. Fertilizer, chemical, machinery and other costs are also likely to rise.
Zulauf explains in Successful Farming magazine, "Agribusiness went through a gut-wrenching process in the '80s, merging, liquidating and slashing capacity." Now, these manufacturers don't have the capacity for a major run-up in demand for inputs, as farmers are likely to see next year, with lowered set-asides and stronger prices."I'm not saying we'll have shortages, just a tightness of supply. And when you have tight supplies and high demand, you generally also get higher prices," Zulauf adds.
He says chemicals and fertilizer, as well as machinery, are high on the list for this tight supply situation.
Another added expense next year may be crop insurance.