What is in this article?:
• Production costs jump nationwide.
• Elevated production costs rose more than10 percent.
• Leading the list of higher production costs was the cost of diesel.
Ag can adapt
“Agricultural producers can adapt to current drought conditions to survive. While some producers may cull herds and opt to grow forage crops as a means to get through tough times, eventually we should see a healthy rebuilding of cattle herds and a return to more normal conditions,” he said.
According to the USDA Summary, in 2011 the United States total farm expenditure average per farm was $146,653 compared with $131,821 in 2010, an increase of 11.3 percent. On average, U.S. farm operations spent $25,129 on feed, $17,075 on farm services, $13,163 on livestock, poultry and related expenses, and $12,334 on labor.
For 2010, U.S. farms spent an average of $20,705 on feed, $16,281 on farm services, $11,128 on livestock, poultry and related expenses, and $12,450 on Labor.
Overall, and fueled by the drought, livestock and poultry producers shared the brunt of increased input costs in 2011. The top three average expenses per farm with the largest dollar increase were: feed, up $4,424 or 21.4 percent; livestock, poultry and related expenses, up $2,035, or 18.3 percent; and fertilizer, lime and soil conditioners, up $1,975, or 20.6 percent.
By region, the Midwest contributed the most to United States total expenditures with expenses of $98.7 billion (31.0 percent), up from $87.7 billion in 2010.
The other regions ranked by total expenditures were: Plains at $73.8 billion (23.2 percent), West at $68.9 billion (21.6 percent), Atlantic at $39.1 billion (12.3 percent), and South at $38.2 billion (12.0 percent).
The sum of total expenditures for the 15 estimate states was $205.8 billion in 2011 (64.6 percent of the United States total expenditures) and $188.1 billion in 2010 (65.1 percent). California contributed most to the 2011 United States total expenditures, with expenses of $31.2 billion, (9.8 percent).
California expenditures were up 3.2 percent from the 2010 estimate of $30.2 billion. Iowa, the next leading state, had $24.2 billion in expenses, (7.6 percent).
Other states with more than $15 billion in total expenditures were Texas with $22.7 billion, Nebraska with $17.3 billion, Illinois with $17.0 billion, and Minnesota with $15.5 billion.
Anderson says input costs and consumer demand for beef, for example, will always be affected by weather. But when the rains finally return and herds expand, livestock production and farming in general will see the return of better profits and fewer losses associated with the drought.
To view the complete USDA Farm Production Expenditures Summary, visit http://usda01.library.cornell.edu/usda/current/FarmProdEx/FarmProdEx-08-02-2012.txt.