Farmers are paying substantially more to grow crops, and the prices they receive have not kept pace, according to a recent analysis by agricultural groups.
The analysis found that the prices paid index for crop production inputs rose more than 38% from July 2018 to July 2026. Over the same period, the prices farmers received for crops increased about 24%.
The gap helps explain why higher commodity prices have not necessarily led to stronger profit margins. Producers also face higher interest rates and equipment costs, rising farmland values and growing farm debt.
Higher land values can strengthen a farm’s balance sheet, but they can also make it more expensive to expand an operation or enter farming.
Farm organizations say federal farm policy should account for today’s production costs and financial risks. The Senate Agriculture Committee advanced its latest farm bill proposal Sept. 16.