Summary: Farmers have had a good year with yields, good harvest weather and stronger commodity prices. The rising costs of inputs and limited availability is causing concern as we plan for 2022.
As we begin to prepare for the holiday season, I think it is a good time to reflect on the past year and prepare for the coming year. Overall, farmers have a had a good year with yields, good harvest weather, and stronger commodity prices.
But, that optimism is being tempered by a sharp rise in input costs and availability as we plan for 2022.
Fertilizer prices are around 300 percent higher today than this time last year.
Crop protection inputs like herbicides and insecticides are much higher and unavailable in some cases.
We expect to see a decrease in planted wheat acres this fall for the reasons above.
The reasons are numerous, some clear and some not so clear. Supply chains are still disrupted on a global scale due to the pandemic and overall disruptions in global trade.
Some weather events such as the hurricanes on the Gulf Coast may have some effect.
Whatever the reasons, it’s safe to say the 2022 crop will be much more expensive to produce than the 2021 crop.
Like a lot of industries, we’ve seen a steady trend of consolidation of companies that provide seed, fertilizer, and crop protection to farmers. So, farmers do not have a lot of choices anyway, and it becomes more of a concern when we see a sharp rise in prices and limited availability of these inputs for farmers.
Farmers are one of the few occupations expected to purchase at retail and sell at wholesale. Farmers also deal with the unpredictability of weather and markets all the time to feed the world and make a living doing it. The volatility we’re seeing in the seed, fertilizer, and crop protection business only adds to the risk farmers assume every day.
This is an issue we continue to be concerned about and will watch closely as we prepare for the 2022 season.
I encourage consumers to continue to shop local to help support our agriculture industry in North Carolina. Access to local producers was a great benefit during the pandemic, but supporting local producers year-round is the best way to ensure they stay in business and can continue to provide access to the freshest foods available.