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Production Expenses

The major agricultural commodities produced in the U.S. have a relatively low per-acre value. In ‎the past, crop prices often failed to keep pace with inflation. For example, the average price paid to ‎farmers for soybeans in 2000 was $4.40 per bushel, the lowest average price since 1972, and a 40 ‎percent decline since 1996. Over the past couple of years, this has been changing. For instance, in ‎‎2012 the cost of soybeans increased to $14.30 per bushel. ‎

USDA tracks both prices received for farm products and prices paid for production inputs. Using ‎the 1910-1914 period as a base, the prices received by today's farmer have increased by at least a ‎factor of six. However, prices paid by farmers for production inputs have increased by at least a ‎factor of sixteen! For statistics on crop totals (prices), visit USDA's National Agriculture Statistics ‎Service here: http://www.nass.usda.gov/Statistics_by_Subject/index.php?sector=CROPS. ‎Exit EPA

Thin profit margins have forced producers to seek efficiencies in all aspects of production. ‎Efficiencies of scale favor large producers who can make the most effective use of large, ‎expensive machines. For crops such as corn and soybeans, commercial viability is based on ‎producing "in volume." These forces have dramatically changed the size and numbers of farms.‎

In addition to efficiencies in machinery and crop production volume, crop inflation costs and crop ‎production expenses are linked to various other factors including gas prices, weather conditions, ‎environmental events, and consumer demand related to crops.‎

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Sources:
U.S. USDA. Economic Research Service. Food Price Outlook: Summary Findings. N.p., n.d. Web. 09 Apr. 2013. <http://www.ers.usda.gov/data-products/food-price-outlook/summary-findings.aspx>. Exit EPA

"World Food Prices Rise to Near-Record High as Inflation Speeds Up, UN Says." Bloomberg. N.p., 5 May 2011. Web. 09 Apr. 2013. <http://www.bloomberg.com/news/2011-05-05/food-prices-approach-record-high-as-grain-prices-fuel-inflation-worldwide.html>.Exit EPA

This page is sponsored by EPA's Ag Center. Ag Center logo


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