Seed corn costs may be as much as $87 to $107 per acre for 2012, after all discounts are applied. Seed bean costs may be about $62 per acre. The Purdue economists project increases in acreage planted with biotech seed, since 2011 corn was about 80% herbicide tolerant and 65% was insect resistant. About 95% of soybean acres are herbicide tolerant.
Crop protectants have not increased much in price in recent years, and the Purdue economists say that will be the case for the coming year. Glyphosate prices fell two years ago and were even lower last year. Other chemicals will see lower prices and some higher, depending on market demands. However, if you remain with products used in recent years, your budget for crop protectants should be about the same as 2011.
Another flat priced trend will be for diesel fuel. Prices surged from 2010 into 2011, but have remained rather steady. For specific monthly pricing, based on the futures market, Kansas State economist Kevin Dhuyvetter provides a monthly forecast which indicates spring diesel fuel prices will be 25% below prices paid in the spring of 2011.
Machinery costs have been rising. If you are in the market for a small tractor, that market is dominated by the stagnant housing market and soft demand for construction equipment. However the demand for large tractors, tillage equipment, and combines is higher as farming operations get larger and weather windows get smaller. Planters and other precision farming implement costs are also higher due to the attachments that reduce overlaps and provide greater efficiency.
Be prepared to expect higher crop production costs for 2012, compared to the past year. Fertilizer prices are higher due to international demands; seed costs are higher because of demand and performance; and machinery costs are higher due to greater efficiency. Crop chemical and fuel prices are flat to lower compared to the 2011 crop.
Source: FarmGate blog