We know prices have been good. The numbers don’t lie, and if you have a crop to sell, you are sitting pretty, right? Right?
We would like to think that, and for the most part, there is still money being made, but the profit margins aren’t as high as we would like them to be. Increased costs of fertilizer, fuels, seeds, chemicals, and everything else; coupled with a supply chain that has us by the throat, and you have a recipe for trouble. Also, if the markets come down, which eventually they must, that profit margin may be all but erased. Because the while the price of crops may be lower, the costs of inputs never go back down. If they do go lower, it is usually not by a bunch. Those prices are going to be here to stay.
The issues farmers face were brought up on Capitol Hill this week and concerns were raised from the USDA… to the Senate… to the White House. Voices were raised to support those who feed the country and feed the world.
United States Agriculture Secretary Tom Vilsack came to Capitol Hill earlier this week for a Senate hearing and he talked about the real problem that could face producers in 2023. The reason for the year gap is that many of 2022’s inputs were booked before price hikes chewed down profit margins. The real test will come in the next two years.
President Biden was in Illinois yesterday to announce relief for farmers to help them do what they do best. Part of that was tied to efforts by Iowa State University to help farmers become less reliant on foreign-produced inputs.
Senator Ernst addressed the Senate hearing and talked about how despite the high commodity prices, high input costs are putting family farms in jeopardy.
Missouri Senator Roy Blunt also talked about how the Russian invasion of Ukraine has had a negative impact on U.S. farmers.
The Senate is set to act on a $40 billion Ukrainian relief and humanitarian package, plus a $5 billion food security package.