Farming costs in Wisconsin were up 8 percent in 2021

Wisconsin farmers spent about 8 p.c extra on bills in 2021 than the earlier 12 months, in accordance with the newest knowledge from the Nationwide Agricultural Statistics Service.

The report discovered the typical Wisconsin farmer spent $181,591 in bills final 12 months. Farmers reported spending extra in nearly each expense class.

Steve Deller, ag economics professor on the College of Wisconsin-Madison, mentioned agriculture skilled the identical provide chain points that nearly each business confronted in 2021.

“Numerous the stuff that farmers must function have been in very low provide. So primarily it is costlier for farmers to function,” Deller mentioned. “It’s like every enterprise. You already know, I would like to purchase a brand new piece of kit, however I am unable to discover it and costs go up.”

However Deller mentioned farmers additionally had introduced in additional cash in 2021 due to pandemic-related aid packages, which meant they might afford to spend extra in some classes.

That features miscellaneous capital bills, which noticed the most important spending enhance in 2021. Farmers reported spending 80 p.c extra on this class than in 2020. Deller mentioned that might embrace something from a brand new laptop system to smaller tools to be used across the farm.

Spending on vehicles and different automobiles was up 39 p.c from the earlier 12 months, at $2,496 on common per farm. The typical farm spent about 40 p.c extra on this class than the typical in 2020.

Farmers additionally spent 33 p.c extra on tractors and associated equipment final 12 months. Simply over 14 p.c of farms reported spending on tractors in each 2020 and 2021. However the common farm spent 34 p.c extra on the equipment in 2021 in comparison with the earlier 12 months.

Deller mentioned identical to available in the market for shopper automobiles, slow-downs in manufacturing due to COVID-19 meant there have been fewer vehicles and tractors obtainable for buy and costs have been increased.

However he mentioned some farmers selected to maneuver ahead with these purchases in 2021 regardless of the upper costs.

“Once you begin to see a number of the provide chain points going away, we’re beginning to see extra materials, automobiles, tractors, which might be obtainable on the market at actually low rates of interest. So, , farmers are principally changing some tools,” Deller mentioned.

Solely three bills noticed a decline in spending in 2021. Spending on curiosity was 7 p.c decrease than the earlier 12 months. Deller mentioned this decline is probably going as a result of farmers refinancing their debt to reap the benefits of decrease rates of interest introduced on by the COVID-19 pandemic.

Current surveys of agricultural bankers have additionally discovered that farmers are higher managing debt than in earlier years, because of increased commodity costs and funds by means of aid packages from the federal authorities.

Spending on land rents was down by nearly 5 p.c final 12 months. Round 9 p.c fewer farms reported spending on lease in 2021 than the earlier 12 months. 

Livestock feed bills additionally declined by 2 p.c in 2021. It was nonetheless the very best single expense reported by farmers, making up 19 p.c of whole farm bills. Deller mentioned the decline in spending is probably going a ripple impact from dairy farmers selecting to cull cows in 2020 when the pandemic created uncertainty round future demand for dairy.

Deller mentioned subsequent 12 months’s report will possible look very totally different, with increased prices for gasoline and ag chemical compounds like fertilizers due to Russia’s invasion of Ukraine. He mentioned that might additionally trigger farmers to chop again on spending in different areas.