Jason Webster talks to a lot of farmers, and he’s sure of one thing.
“We’ve got this pie of revenue when we harvest this crop. And there’s all these people that want their little chunk of it,” says Webster, who heads up Precision Planting’s Precision Technology Institute Farm at Pontiac, Ill.
“And in the end, you just hope there’s a little sliver left over for the farmer. Right now? There’s no sliver,” he says.
“The whole system’s broke.”
Webster, himself a farmer, is describing the widening gap between agribusiness and the common farmer, as farmers wrap up a growing season of low grain prices and high input prices.
Farm equipment prices alone went up 20% from 2021 to 2023, according to University of Illinois ag economists Gary Schnikey and Nick Paulson in a new report. Before that, prices increased just 14% over nine years, from 2011 to 2020.
Why the big jump since 2021? They believe the significant price increases correspond with supply chain challenges that developed during the COVID-19 pandemic, coupled with a still-ongoing rise in inflation. Labor is in short supply. Trade disputes are likely to persist and continue disrupting supply chains.
By the bigger numbers
A few more depressing figures from Schnitkey and Paulson:
- Depreciation costs increased from $69 per acre in 2021 to $87 in 2024.
- Fuel and oil increased from $19 per acre in 2021 to $23 in 2024.
- Repairs increased from $32 per acre in 2021 to $39 in 2024.
- Machine hire increased from $16 per acre in 2021 to $22 in 2024.
And don’t forget higher interest rates and higher repair costs. Many parts have doubled or tripled in cost in the past five years.
Putting it all together, the U of I ag economists peg overall machinery-related costs at a 25% increase from 2021 to 2024.
Yikes.
Farmers are being driven to the breaking point. Many are angry at large equipment corporations and, in some cases, at dealerships, which just keep consolidating, reducing competition.
On the fertilizer side, DAP is up 7% this month, averaging $921 a ton. Anhydrous is up another 6% this month, averaging $814 a ton.
According to data collected by Farm Aid, the top four companies in each industry hold significant portions:
- 80% of beef
- 70% of hogs
- 60% of poultry
- 83% of dairy
- 60% of seed
- 77% of fertilizer
Production agriculture’s supply chain is dominated by about three dozen companies, according to an analysis by Farm Action, a nonprofit that fights corporate monopolies in food and agriculture.
Farmers want more competition, not less, but what they’ve gotten is less. And farmers like Beth Dorsey, Edwardsville, Ill., say the cost of inputs and the lack of enforcing antitrust laws — for decades — have crippled agriculture.
“Farmers are caught in the middle of politics and bad policy,” she says. “We don’t want handouts that just go right back to paying suppliers and banks.”
Finding solutions
So what’s the solution? Farmers need the government to pursue violations of antitrust laws and enforce the Packers and Stockyards Act, which was established in 1921 in response to the concentrated meatpacker market and gave more regulatory powers to the federal government.
And, we need to have a real conversation about what’s important in agriculture and U.S. food production. Back in 2019, then-USDA Secretary Sonny Perdue defended agricultural consolidation to a group of dairy farmers, saying, “In America, the big get bigger and the small go out.” By 2023, then-secretary Tom Vilsack stood at the Farm Progress Show in Decatur, Ill., and drew out — on a literal whiteboard — his plans for funneling money to small farms.
Neither addressed the real input elephants in the room, and nothing got done. Or if you look at it another way, everything got done (see that bulleted list above).
Agriculture has suffered the extremes of partisan politics the past eight-plus years, and now we’re operating under a partial farm bill that was never negotiated or debated publicly.
“Everybody else is trying to make money off the farmer,” Webster says. “The problem is, right now, farmers aren’t making any money.”
Come winter, that’s a pie that won’t have any slivers left — much less a slice.
Comments? Email holly.spangler@farmprogress.com.