Farmers spent close to $400 billion on 2014 production costs

economic-forecast-headerU.S. farmers spent $397.6 billion on agricultural production in 2014, up 8.3 percent from 2013. That’s the largest increase since 2008, according to the Farm Production Expenditures Annual Summary, published by the U.S. Department of Agriculture’s National Agricultural Statistics Service.

Feed, already the largest expenditure category for the nation’s farmers, saw the highest increase since 2013. In 2014, producers spent $63.7 billion on animal feed, up 16 percent from the previous year. Farm services, livestock, poultry and related expenses and labor were the other three major categories that saw an increase of 11.4 percent, 11.3 percent, and 8.6 percent respectively.

“Feed costs were definitely higher last year due to increased demand and crop production issues in some parts of the country,” explained Tony Banks, a Virginia Farm Bureau Federation commodity marketing specialist. “Grain and soy prices overall are lower this year, so we should expect to see feed prices soften in 2015 assuming there are no major production issues heading into harvest.”

Per farm, average expenditures totaled $191,500 compared with $175,270 in 2013, up 9.3 percent. As in the previous year, crop farms accounted for the majority of production expenditures in 2014, although the gap between the sectors was significantly smaller than in previous years. The average expenditure per crop farm totaled $213,150 compared to $173,285 per livestock farm.

Banks added that technology and plant and animal genetics available to producers seem to improve each year; however, it also costs producers more to purchase and take advantage of those improvements. Labor costs also continue to rise each year.

Regionally, the largest increase in production expenditures was in the Great Plains region, which includes Kansas and Texas. In that region, expenditures rose by $11.6 billion from 2013. For 2014, total expenditures by region were: Midwest, $124 billion; Great Plains, $99.3 billion; West, $85.6 billion; Atlantic, $48.2 billion; and South, $40.5 billion.

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