2022 Crop Budgets Reflect Higher Costs

There’s little doubt input and production costs will be higher in 2022 for crop producers. The question is, how much higher? Recently released crop budget estimates from the UNL Department of Agricultural Economics hint at an answer. The 84 budgets cover 15 crops using a variety of tillage practices, crop rotations, seed technologies, nutrient and pesticide applications, and yield goals. Information on machinery operation and ownership costs, material, and service prices are also included in the budget information. The budgets and information can be found at https://cropwatch.unl.edu/budgets and within the Agricultural Budget Calculator (ABC) program at https://agbudget.unl.edu/. The budgets can be downloaded and modified to fit individual farming operations.

Table 1 lists the ranges of estimated per bushel costs for dryland and irrigated corn, wheat, and soybeans for 2022 compared with this year. The estimates are the sum of all costs, including machinery ownership and land opportunity costs, divided by projected yields. As Table 1 shows, costs for next year are markedly higher across all three crops and irrigation practices. And these estimates might be conservative. Prices for materials and services were obtained in October, so the budgets do not reflect price increases since then. Still, compared to prices used to create this year’s crop budgets, fertilizer prices were up 93 percent on average, fungicides 20 percent, and herbicides 26 percent.

The UNL economists who created the budgets note they should only be used as guides because individual operations will differ. Nevertheless, the projections show the stark cost increases farmers will be facing next year. Current commodity prices for next year’s harvests indicate a possibility for positive margins. As of this writing, the December 2022 corn futures was trading at $5.43 per bushel, November 2022 soybeans at $12.38, and July 2022 wheat at $7.76. Knowing costs and having a marketing plan in place will be essential for achieving positive margins.

Table 1. Estimated per Bushel Production Costs