Farm Production Costs on the Rise

Farm cash receipts for 2017 are forecast to be up by about 2.5 percent which is the first increase in a couple of years according to the USDA.

Deputy Chief Economist Warren Preston says the bad news is that cost is also rising for the first time in two years.

“But part of that is tied to the effort that is going into increasing production. Some of that is also due to higher labor costs, interest rates ticking up on a little higher borrowing and fuels and oils going up so energy prices going up a little bit.”

Feed costs are down, which is a mixed bag because it’s good for livestock producers but bad for corn and soybean growers.

In total, USDA is forecasting farm cash receipts $9.3 billion higher than total production expenses but most of the positive margins are in livestock.