By Paul Schattenberg
A report by the Agricultural and Food Policy Center, AFPC, at Texas A&M University titled "Economic Impact of Higher Crop and Input Prices on AFPC's Representative Crop Farms" provides insights into the economic impacts of higher crop and major input prices on the center's 64 representative crop farms.
The report was compiled by Joe Outlaw, Ph.D., and Bart Fischer, Ph.D., co-directors of the AFPC in the Department of Agricultural Economics of the College of Agriculture and Life Sciences at Texas A&M, Bryan-College Station. Other department contributors included Henry Bryant, Ph.D., J. Marc Raulston, George Knapek, and Brian Herbst. The AFPC is part of Texas A&M AgriLife Research and the Texas A&M AgriLife Extension Service.
About the report
"This report is a follow-up to an AFPC briefing paper that analyzed the impact of higher fertilizer prices on the AFPC's representative farms done at the request of U.S. Rep. Julia Letlow, explained Fischer. "The current report analyzes the economic impacts of higher crop and major input prices on 64 representative crop farms throughout the U.S."
The analysis was requested by Sen. John Boozman, a ranking member of the Senate Committee on Agriculture, Nutrition, and Forestry.
"Input suppliers around the world are having a tough time meeting demand for most of the major crop inputs," Outlaw said. "While there are many causes, the most cited revolve around the pandemic and the resulting supply chain and distribution problems that have persisted."
He said in addition to supply chain and distribution issues, inputs such as fertilizer have also been hit with import duties by the U.S. International Trade Commission on phosphorus and urea ammonium nitrate solutions.
"These factors, along with the Russian invasion of Ukraine, with both countries being major fertilizer exporters, have further limited fertilizer availability and led to even higher prices," Outlaw said. "The Russian invasion has also greatly reduced corn and wheat exports from Ukraine, which has led to higher crop prices around the world."
Fischer said while producers are unquestionably facing higher prices for inputs, it was less clear how those high input prices were translating into increases in the cost of production.
"For example, some producers locked in input prices last year before the significant run-up in prices, and we expect that most producers will reduce input use in response to higher prices," he said.
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