Georgia farmers would love to see their cost of doing business
go down a little. They’d
be happy even to see these costs stay the same for a year. But
they shouldn’t count on
it.

“Overall, it looks like the cost of farming will go up 2-4
percent next year,” said Bill
Givan, an economist with the University of Georgia Extension
Service.

In fact, Givan said the only bright news on farm input costs is
that interest rates
currently aren’t predicted to rise. “The cost of money looks a
little flat,” he said.

Since most farmers borrow at least part of the cost of putting
crops into their fields, the
prospect of stable lending rates is good news.

The price of everything else, though, seems to be headed up.

“Fuel costs are well above levels of a year ago and will
probably ease a little higher,”
Givan said. “The price of equipment will likely be up a little,
too.”

Fertilizer prices are likely to rise, too. How much, though,
will depend on events far
from Georgia. “It depends partially on how much corn is planted
in the Midwest and
how much nitrogen is needed,” he said.

Some seed costs will probably ease upward, he said, but not
all. “Soybean seed is
expected to go up,” Givan said, “but the outlook is for peanut,
cotton and corn seed
prices to be a little flat.”

For a long time, he said, prices stayed relatively flat for
chemicals, a big part of
farmers’ input costs.

“But four or five years ago they started rising about 3 percent
per year,” Givan said.
“It looks like that trend will continue next year, too.”

Actual chemical costs to farmers are hard to predict, though, he
said, since the need to
use chemicals can vary so much with fluctuating weather and
insect populations.

Givan figures labor costs to rise slightly, too, but admitted
there isn’t much ground for
forecasting.

“The way farmers pay their labor can vary so much,” he
said. “All we can do is look at
what has happened in the past.”

Most of those costs affect only row-crop production. For
livestock and poultry farmers,
the main input is the cost of feed. “And right now, feed costs
appear to have leveled
off,” he said.

That’s good news for the folks who raise livestock and chickens.
It’s not so good, of
course, for the ones who grow the feed.

What do rising input costs mean to consumers?

Very little, Givan said. Since only 22 cents of the consumer’s
food dollar goes to the
farmer, most changes in food prices aren’t caused on the farm.
Farmers don’t control
the price of their products, either. So they can’t pass their
higher costs to their
customers.

“They have to make up the difference by becoming more
efficient,” Givan said. “They
have to keep learning to get better yields and lower the cost
per unit to keep making a
profit on their crops.”