Input Costs a Global Concern

Survey after survey show rising input costs is a top concern for American crop producers. Perhaps they can take comfort in knowing they are not alone. A global survey of farmers shows input costs are a top concern no matter where the farm is located. Globally, 53% of farmers said increased input prices were among their top three profit risks. Input costs were a top concern in three of four regions. Only farmers in Latin America cited extreme weather as a bigger concern. The results come from McKinsey & Company’s Global Farmer Insights survey conducted between April and July. In all, 5,500 farmers were surveyed operating farms ranging in size from less than 120 acres to more than 6,500. Row crop farmers represented the largest segment of responses followed by specialty crop farmers. Livestock farmers were not included.  

Farmers in North America and Europe cited increased input prices as a top concern and commodity price variability the second-most worry. Extreme weather was the second-most cited concern for farmers in Asia and worldwide. Labor shortages were also noted as a concern in Asia, but not so much in other countries.  

Figure 3. Farmers’ Top Profit Concerns

The survey also asked farmers where spending cuts would occur during times of tight margins. Spending on fertilizer was most likely to see cuts (36%), followed by farm equipment (16%), and fungicides (15%). Fertilizer and farm equipment were also identified as areas where farmers were likely to increase spending when margins improved, 48% and 35%, respectively. Seeds were another area identified for spending increases in better times.  

The shared, global concern with rising input costs is not surprising. Commodity and input markets are global, and their impacts are not limited to farmers in one region. It seems the world’s farmers have more in common than sometimes thought.  

Figure 4. Farmer Spending Cuts & Increases

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