U.S. agricultural production costs declined sharply in 2015

economic-forecast-headerU.S. farming production costs have decreased for the first time in several years.

U.S. farmers spent $362.8 billion on agricultural production in 2015, down 8.8 percent from 2014. That represents the reversal of a long-term trend of growing costs, according to the Farm Production Expenditures report published by the U.S. Department of Agriculture’s National Agricultural Statistics Service.

Feed and farm services—the two largest expenditure categories for U.S. farmers in 2014—both declined 8.2 percent last year. Producers spent $58.5 billion on animal feed and $41.6 billion on farm services in 2015. Expenditures in the USDA category of “livestock, poultry and related expenses” totaled $45.4 billion last year, an increase of .7 percent from 2014, and capital expenditures increased 16.7 percent to $700 million.

“It takes a lot of input for farmers to grow and raise the food and fiber we use each day,” said Tony Banks, a commodity marketing specialist for Virginia Farm Bureau Federation. “Farmers spend a lot of money to raise crops and livestock, often in return for very small margins.”

In 2015 the livestock sector accounted for the larger portion of overall production expenditures. Livestock producers spent $182.6 billion—6.6 percent less than in 2014. Crop producers spent $180.3 billion, which is 10.9 percent less than they spent in 2014.

Per-farm average expenditures totaled $176,181, 8 percent less than 2014’s $191,500. In 2015, the average U.S. farm spent $28,408 on feed, $22,047 on livestock, poultry and related expenses, $20,202 on farm services and $15,443 on labor.

Regionally, the Midwest saw the largest production cost decrease—$11 billion. Total expenditures by region in 2015 place the Midwest at $113.1 billion, compared to the South’s $37.1 billion.

“Expenditures in the Midwest are much higher because they have more farmland,” Banks said.

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