Input Costs/Supply Chain Problems
Sixty-three percent of respondents to the Tidbits survey identified rising costs as the top concern for 2022. Rising fertilizer and chemical prices coupled with worries over supply chain backlogs and shortages are no doubt fueling the concern. Estimates in October by farm budget experts at the UNL Department of Agricultural Economics suggested per bushel costs for corn could be anywhere from $0.45 to $0.65 higher compared to last year. Costs to produce soybeans will be higher as well. For livestock producers, the rising costs of feed, energy, and transportation are major concerns. Debt and interest costs look to rise too as the Federal Reserve is poised to increase interest rates to combat inflation. Many factors are behind the cost increases. Supply chain gridlock, labor shortages, global supply shortages, extreme weather events, trade disruptions, and general inflationary pressure in the economy. Most observers think these troubles will ease during 2022, but not until later in the year well after production decisions have been made. Of course, omicron, the latest COVID-19 variant could alter this timetable.