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Inflation Sends Farm Income Projections Spiraling

(West Lafayette, IN) - Skyrocketing inflation could make 2022 a very challenging year for farmers' pocketbooks after a very profitable 2021.


A percentage of farmers raising corn in 2021 might switch to soybeans next year to help ease the pain of shrinking margins if there's no let-up in rising input costs. That's was the main message out of the November 10 monthly corn and soybean report webinar hosted by Purdue University.


“It’s not a pretty picture,” said Michael Langemeier, Associate Director of the Center for Commercial Agriculture at the West Lafayette campus.

Statistics presented during the webinar project the very good net farm income of $270 per acre this year will drop below $100 per acre next year.


Jim Mintert, the Director of the Center for Commercial Agricultural, said the sharp increase in farm operating expenses is historical, at least in recent memory, especially with fertilizer.


He seemed particularly disturbed about the possibility of anhydrous ammonia costing a whopping $1,350 per ton in early November going up, too much as $1,500 per ton during the spring planting season.


“The numbers are shocking,” Mintert said.

Mintert said the result could be net farm income next year being more in line with profits from 2016 through 2019 when farmers struggled from deficient corn and soybean prices.

"I don’t think we’ve ever seen a rise in production costs as rapid and as large as what we’ve seen in the last few months,” Mintert said.

Right now, Langemeier said the projected cost of other nutrients like phosphorous, potassium, potash, and nitrogen costs nearly $1.40 per bushel next year compared to .80 per bushel in 2021.

“It’s definitely unprecedented particularly for corn,” Langemeier said.

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