U. S. farmers have not seen their input costs decline significantly despite the recent drop in energy prices, Agriculture Secretary Ed Schafer said Nov. 18, but he remained confident conditions would improve before growers plant their 2009 crops.
Prices for corn, soybeans, wheat and other crops have dropped after setting record highs earlier this year. A similar decline has occurred in oil, which is down about 60 per cent from its $147 per barrel record high posted on July 11.
But at the same time, the cost of fuel, fertilizer and other inputs has failed to match the drop in commodity prices, leaving some farmers to spend more to produce a crop such as corn than they will get back in the marketplace.
“Right now there are a lot of issues in corn and soybeans, especially where people would say if I plant this I’m going to lose money,” Schafer told Reuters in an interview.
“We’re hoping to see come planting time season next spring that the input would have come down commensurately with energy costs. Things are starting to move in the right direction,” he added.
Schafer also said the farm economy remains in good shape despite the turmoil sweeping financial markets around the world.
Even with the recent declines, USDA has predicted that corn and wheat will post the highest farm gate price on record at $4.40 and $6.85 a bushel, respectively.
Soybeans would fetch their second-highest average price at $9.85 a bushel, behind the 2007 crop. Farmers also are seeing healthy farm income and export figures in 2008.