USDA: Farm production expenses drop

WASHINGTON—U.S. farm production expenditures dropped nearly $20 billion in 2009 after a record-setting high in 2008.

"2008 was an abomination," said Jonah Bowles, agricultural market analyst for Virginia Farm Bureau Federation. "It was a difficult year for farmers, so it’s good news that expenses dropped."

According to a report released by the U.S. Department of Agriculture’s National Agricultural Statistics Service, this was the first major decline in farm expenses in nearly a quarter-century. Average production expenditures per farm fell
6.4 percent in 2009.

Falling gas prices were a major factor behind the overall decline, which led to decreases in the cost of fuel, fertilizer and agricultural chemicals. The report said farmers spent $12.4 billion on fuels in 2009, down 22.5 percent from the previous year.

The average U.S. farm operation spent $5,658 on fuel in 2009—$1,642 less than in 2008.

And consumer gas consumption has mirrored that of farmers.

Total fuel expenditures nationwide included $7.22 billion for diesel, down 26.8 percent from 2008; $2.43 billion for gasoline, down 19.3 percent; $1.95 billion for liquefied petroleum gas, down 3.9 percent; and $800 million for other fuels, down 27.3 percent.

In addition to fuel, other input costs for farmers dropped in 2009. The average cost of fertilizer, lime and soil additives dropped 10.7 percent; the average cost of farm services decreased 4.2 percent; and average feed costs decreased
4 percent.

"Farm expenditures are constantly in flux, so if you take 2008 out of the equation, farmers are not much better off today than they were before that year," Bowles said. "The nature of farming is volatile, and we’re just lucky that farmers are willing to take the risks."

Contact Bowles at 804-290-1117.

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