A Look at Production Costs and Implications for Agriculture

Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery Agricultural production is filled with uncertainty and risk. There are many factors outside of farmers’ control that can affect profitability, making risk management an essential business practice. One area that has impacted producers in 2022 has been the continued rise in input prices.

Initially fueled by supply chain disruptions from the sudden impacts of COVID-19, agricultural producers have been facing increased production costs on key inputs since 2020.Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery

Production Costs Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery

To put in perspective the current narrative on rising input costs, figure 1 shows graphs of a national index of prices paid for key farm inputs in the United States since January 2011. The index, available from the USDA National Agricultural Statistics Service (NASS), is tied to the average price paid in 2011 for a particular Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery category. A common trend can be seen during three distinct periods; 2011-2014, 2015-2020, and 2020-2022.The first period, from 2011 to 2014, shows rather stable prices paid, with many of the indices in figure 1 hovering around the 90-110 mark (i.e. around 100 or the average 2011 price levels). Feed was the big exception during that period, increasing over 20% in 2012 as commodity prices of grains were at then record highs.Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery

This started to change in late 2014/early 2015 as prices dropped for all but machinery and agriculture services. In the case of fertilizer and fuel, the drop was substantial. For chemicals (insecticides, fungicides, and herbicides), prices fell slightly from 2014 levels back to or slightly below average 2011 levels.

Machinery prices continued a slow and steady increase, while agriculture services remained relatively flat from 2015-2020. Many commodity grain prices were also at recent lows during that period.Agricultural machine,gearbox,agricultural gearbox,agricultural reducer，Lithium battery