By Andi Anderson
The United States Department of Agriculture (USDA) has projected that farm production costs will reach record levels by 2027.
According to Farm News Media, farmers are unlikely to find significant relief from rising expenses anytime soon. The report shows that production costs for major crops will continue increasing, with corn estimated at $952 per acre, soybeans at $701, sorghum at $477, and wheat at $428.
Farm News Media also reported that “Compared to USDA’s earlier 2026 projections, total production costs were revised higher for every major crop included in the report.” Faith Parum, Economist at the American Farm Bureau Federation, explained that rising costs are mainly due to higher spending on seed, chemicals, labor, machinery, repairs, and land rent instead of fuel and fertilizer.
Over the years, production costs have increased significantly. Since 2005, expenses have more than doubled for several crops, including soybeans (+165%), corn (+146%), and wheat (+106%). Farm News Media highlighted that “For many crops, projected 2027 costs exceed not only USDA’s previous forecasts but also the highs experienced during the supply chain disruptions and inflationary pressures of the early 2020s.”
Parum further stated, “‘While commodity prices often fluctuate from year to year, production expenses have steadily trended higher, leaving farmers increasingly exposed when crop prices decline.’” She added, “‘The record costs projected for 2027 suggest that rising input expenses are no longer a temporary challenge but a persistent reality facing farmers across the country.'”
The report also noted that 2026 production costs have been revised upward. “Rice had the largest increase, with projected costs rising nearly $75 per acre (5.6%), followed by peanuts at nearly $30 per acre (2.5%) and corn at more than $19 per acre (2.1%),” Parum wrote. Fuel and fertilizer costs were major contributors, with fuel, lube, and electricity expenses rising as much as 41% for some crops.
At the same time, crop prices are declining. Successful Farming’s Bryan Doherty reported that markets for corn, soybeans, and wheat have faced strong selling pressure due to good planting progress and technical market factors. Prices have dropped significantly, with corn falling below $4.50 and soybeans below $11.50.
This combination of rising costs and falling prices is creating financial challenges for farmers, making profitability more difficult and increasing risks in the agricultural sector.
Photo Credit: soybean-board
Categories: Illinois, Government & Policy