Surprise, Surprise—Production Expenses Higher
Nebraska’s farmers and ranchers won’t be surprised by figures released by the USDA National Agricultural Statistics Services (NASS) which showed expenses in 2021 were higher compared to 2020. The figures only confirm what farmers and ranchers already know. Production expenditures for Nebraska totaled $24.5 billion in 2021, up 21 percent from the year prior. Total expenditures per farm or ranch averaged $547,321 in 2021, up 23 percent (Figure 1). The figures are based on responses by Nebraska producers on the Agricultural Resource Management Survey.
Livestock expenses (purchases of feeder animals) were estimated at $6.52 billion last year, an increase of 30 percent. Expenditures for feed were $2.96 billion, up 36 percent. Crop producers saw expenditures increase 21 percent for chemicals and 32 percent for fertilizers. Spending for fuel increased 59 percent and rent was up 22 percent. Prices increases were the primary reason behind the higher expenditures, although some of the increase could have been the result of increased quantities.
Farm and ranch production expenditures will be higher again this year when the final numbers are tallied. Estimates of the non-land costs for corn production in Northern Illinois by agricultural economists at the University of Illinois show a 20 percent increase this year over 2021. Fortunately, prices received are higher this year as well, offering opportunities for positive returns. The risk for producers moving forward is that prices received fall before input prices do.
Figure 1. Nebraska Farm Production Expenditures, 2020 & 2021