Thune: Farm Costs Hurting The Bottom-line
Staggering farm input costs are driving Ag profits into the ground. South Dakota Senator John Thune said it’s a tale of two economies: one, the economy of scale, and two, the cost of farming.
“This year will be the record year in terms of gross farm receipts. In other words, top-line revenues in agriculture, highest ever, a 14% increase over last year. And yet, they’re going to show an inflation-adjusted net farm income reduction of 1%.”
And for good reason Thune noted.
“You look at the cost of fertilizer since 2020, it’s gone up 84%. The cost of fuel and oil has gone up 35% since 2020. You look at these increases and what it costs to produce a crop this year, and you can see why all these throughout the entire food chain, the impact that inflation is having, ultimately felt by the American consumer and the American family.”
And Thune noted, at the grocery store, the price of food, has gone up 13.5%, year-over-year, the highest rate of increase since 1979
But Russia has further aggravated food inflation, destroying or damaging nearly 16% of Ukraine’s crop storage facilities, based on a new, independent report, and initially blockading Ukraine’s Black Sea ports. The two nations are also major sources of fertilizer, and Russia is a major supplier of oil and gas.
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