Wisconsin Farmers Expect to see Record Costs to Plant Crops

By Hope Kirwan

Young corn plants grow in a field in rural Ashland, Neb., Wednesday, May 30, 2018.

As the calendar ticks down to spring, Wisconsin farmers can expect to pay a record high amount to put their crops in the ground this year.

Ag economist Paul Mitchell said at the Wisconsin Agricultural Outlook Forum in January that the cost of production in Wisconsin and surrounding states is forecast to set a new record this year, after several years of increases. 

Mitchell, who leads the Renk Agribusiness Institute, said a University of Wisconsin-Extension budget tool shows it will cost $1,017 per acre to plant corn for grain, while silage is estimated to cost $1,134 per acre. Soybeans are projected to cost $696 per acre to produce.

While the actual cost to plant looks different for every farm, Mitchell said during his presentation that average costs are 10 to 20 percent higher this year than in 2022. He said that boils down to much thinner profit margins, even if crop prices remain at the higher levels seen last year.

"Will commodity prices stay high enough to justify these costs? That's going to be the big question," Mitchell said at the forum. "We've got margins out there, we can make money ... will these make sense? Can I continue to make money at these high prices?"

He said there is some evidence that fertilizer and energy costs are declining, two items that took a toll on farmers' profits last year.

Purdue University in Indiana surveys farmers monthly about their finances in its Ag Economy Barometer. In the latest survey from January, 22 percent of respondents said they expect to have a larger operating loan this year compared to 2022. Eighty percent of those respondents said the larger loan was due to increased input costs, while only 5 percent reported it was due to carrying over unpaid debt.

Aaron Tigert is regional vice president of core markets for farm lending agency Compeer Financial. He said it's hard to paint broad strokes about whether farmers will be borrowing more to plant this spring, especially because many producers have had more cash on hand after two years of strong profit margins.