USDA: Producers' input costs continue to rise

Crop prices have increased, but so have farmers' input costs, according to statistics from the U.S. Department of Agriculture.

Recent corn prices were approaching $6 per bushel and soybean prices were more than $12 per bushel. Last year, in April, corn prices in Nebraska were averaging $3.32 per bushel and soybeans were $6.63 per bushel.

On Friday, Nebraska AAA Daily Fuel Gauge reported a new record highs for Grand Island as regular gasoline was averaging $3.609 per gallon and diesel was at $4.201 per gallon. Compared to a year ago, regular gasoline has gone up 45 cents per gallon and diesel up $1.36 per gallon.

According to the USDA, farmers in the Northern Great Plains have seen a 62 cents per gallon increase in unleaded gasoline from April 2007 to April 2008. Diesel prices, bulk delivery, has gone up $1.09 per gallon from April 2007 to April 2008.

Another input cost that has skyrocketed for farmers, which is fossil fuel based, is fertilizer costs.

According to the USDA, farmers in the Northern Great Plains have seen the following fertilizer price increases per ton from April 2006 through April 2008:

-- 8-32-16, $410.

-- 10-34-0, $376.

-- 11-52-0, $546.

-- 18-46-0 (DAP), $551.

-- Ammonium Nitrate, $144.

-- Anhydrous Ammonia, $242.

-- Muriate of Potash, 60-62 percent, K2O, $267.

-- Nitrogen Solutions, 28 percent, $144;

-- Superphosphate, 44-46 percent, P2O5, $508;

-- Urea, 44-46 percent, $192.

According to the National Corn Growers Association (NCGA), one of the chief issues affecting both fertilizer price and demand is the increased globalization of the market, as well as higher energy costs, especially for natural gas.

A recent NCGA white paper reported that natural gas, which supplies hydrogen for the production of ammonia and has historically accounted for 70 percent of the cost of ammonia production, has seen its price quadruple since 1999 -- from $2 to $8 per million BTUs, ballooning its share of the total ammonia production cost to 85  to 90 percent. Since then, 26 ammonia plants have closed and U.S. production capacity has decreased by 40 percent.

The report also accounts how transportation and distribution costs have jumped, driving up the price of nitrogen since the U.S. has turned to global sources. Ocean freight fees rose from 300 percent to 400 percent from January 2003 to 2008, and shipping anhydrous ammonia by rail has almost doubled since January 2005.

Another area that has seen large price increases over that last several years, according to the USDA, are field seeds.

For example, for farmers in the Northern Great Plains, corn, hybrid biotech field seed has increased from $53 from 2005 to 2008. In Nebraska, last year, the USDA estimated that more than 70 percent of the more than 1.4 billion bushels of corn harvested was of biotech varieties. Corn, hybrid non-biotech seed, during the same time period, increased only $21.60.

Soybean seed cost, per bushel, has increased $11.20.

Also, farmers in the Northern Great Plains have seen price increases in machinery and tractors. For example, a 4-wheel drive 200-280 P.T.O. horsepower tractor has increased in price, on average, $26,000 from 2006-2008.

The USDA also reported that feed prices paid by livestock farmers in the Northern Great Plains have also increased over the last two years (2006-2008).

For example, beef cattle concentrate, 32-36 percent protein, has shot up in price from $142 per ton; hog feed, 38-42 percent protein, has increased $128 per ton; and soybean meal, 44 percent, has gone up $50 per hundredweight.

While feed costs have gone down, the USDA reported that steer and heifer prices have declined from April 2007 to April 2000 $7.90 per hundredweight; and barrow and gilt prices have declined $7.10 per hundredweight.