K-State Research and Extension News
August 13, 2013
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New ACCC fact sheet outlines rising and changing costs of production agriculture


MANHATTAN, Kan. – In the latest installment to the Arthur Capper Cooperative Center (ACCC) fact sheet series, Brian Briggeman and Chuck Mickelsen explore the evolution of the costs of agricultural production, and peer into the future evolution of these costs.

“Today, the costs of agricultural production have surged to the historically high levels of the late 1970s,” said Briggeman, director of the Arthur Capper Cooperative Center at Kansas State University.

Briggeman and Mickelsen, both from the Department of Agricultural Economics at K-State, compared these elevated costs to the 1970s, showing that technological costs have surged for today’s producers. On an inflation adjusted basis, total costs of producing an acre of corn are just 2 percent higher today than they were in 1975. Where the differences lie between these two time periods is in the cost of seed, nearly 200 percent higher, and cost of machinery and equipment, nearly 100 percent higher.

“While some costs have risen sharply, land rental costs remain below their 1970s highs,” said Briggeman. “Looking ahead, economic conditions suggest costs may continue their rise, especially land rents.”

These added costs have provided benefits to farmers, such as improved yields and farm efficiency. And at today’s commodity prices, these benefits have led to solid profit opportunities for crop farmers.

However, history has shown that these profits are often short-lived. So, the question is will these profits hold if these sizable costs continue to grow?

For more information about what producers can do in the face of rising costs, interested readers should read the new ACCC fact sheet titled, “Rising and Changing Costs of Production Agriculture,” available online at the Arthur Capper Cooperative Center (ACCC).

More information is available by contacting Briggeman at bbrigg@k-state.edu or 785-532-2573.

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K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by: Amanda Erichsen
aerichsen@agecon.ksu.edu
K-State Research & Extension News

Brian Briggeman – 785-532-2573 or bbrigg@k-state.edu