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David Sparks Ph.d Input Costs Depression
by David Sparks Ph.d, click here for bio

Program: Line on Agriculture
Date: January 04, 2018

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According to DTN/ The Progressive Farmer, the outlook is bleak for ag producers and agribusiness in general. DTN Markets Editor Katie Micik, director of the confidence index told me that according to her latest survey, producers’ overall confidence fell to a current 92.7 from 99.4 in August and 103.4 a year ago. "One of the interesting things about our survey was the underlying data, attitudes toward input prices and incomes is pretty pessimistic right now. How could that be? One of the big input costs is fuel which is cheaper than it has been for the last 10 years. Fuel makes up a fairly small portion of a farmers total cost of production. In our survey when we asked farmers how they feel about current input prices, are they good, bad or normal? For the first time the majority of producers said they felt current input prices are bad. That's about 53% of our respondents and it's the first time it has been a majority. Historically, it has mostly been in the normal category, some saying it’s good. So what we're seeing right now is a lot of farmers are trying to price out there seed expense for the year and that's one of the most costly inputs that they have. They are finding that even though commodity prices are going down, seed prices are not softening up in relation to that. Fertilizer prices have come down off of some of their historical peaks but they are still fairly expensive when priced in comparison against what current commodity prices are.”

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