American farmers are paying significantly higher prices for their weed-killing chemicals, crop seeds, fertilizer, equipment repairs and seasonal labor, eroding some of 2021’s windfall from rising crop prices. Higher farm costs could help push up grocery bills further in 2022, analysts say, following a year in which global food prices rose to decade highs, the Wall Street Journal reported. Supply-chain constraints and staffing problems are leading to higher prices for products and supplies across a variety of industries, especially food. U.S. inflation hit its fastest pace in nearly four decades last year. Food prices surged 7% in January, the sharpest rise since 1981, the Labor Department on Thursday said, as meat and egg prices continued to climb at double-digit rates. A rally in prices for agricultural commodities such as corn and soybeans, which kicked off in mid-2020, pushed up incomes for U.S. farmers and led them to spend more freely on farmland and machinery. In 2021, U.S. farms’ net income was estimated to be about $117 billion, up 23% from 2020, according to the U.S. Department of Agriculture. Even as crop prices remain high, supply costs are expected to outpace the price of agricultural goods in 2022, according to a January report from the Federal Reserve Board. Net income for farmers in Kansas is estimated to fall 65% from a year ago, according to a January study from Kansas State University. Read more. (Subscription required.)
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