Rising grain production costs are attributable to more than what goes into your tractor's gas tank, says Gary Schnitkey, University of Illinois Extension farm management specialist.
Of the $50 increase in per-acre costs between 2003 and 2005, less than half are directly attributable to rising energy prices, he says, based on a recent study.
For northern Illinois grain farms, per-acre financial costs have increased from $349/acre in 2003 to $399/acre in 2005, an increase of $50/acre.
“Of the $50 increase, energy-related items account for $22/acre, or 44%, of the cost increase. Fertilizer is the leading cost increase category, with a $16/acre increase between 2003 and 2005. Fuel and oil costs increased by $6/acre during that time,” says Schnitkey.
Schnitkey co-authored the study with colleague Dale Lattz called “Cost Increases: It's Not Just Energy.” You can access the full report at www.farmdoc.uiuc.edu/manage/newsletters/fefo06_11/fefo06_11.html.