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What are farm costs going to look like in 2023?
In our latest video, Kevin McNew, Chief Economist at FBN® discusses:
Input prices
Fertilizer prices
Chem prices
What to expect from interest rates.
To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI.
In 2022, farm inflation was off the charts. We saw higher fertilizer prices, higher chemical prices. We had interest rates starting to move up.
What can farmers expect for 2023? I think the good news is we will see some moderation in terms of key inputs that farmers are buying this winter. Namely, we expect fertilizer prices to retreat a little bit off of the highest set in the spring.
We do also expect chem prices to come down. We're seeing pretty dramatic return to normal valuations for active ingredients out of China.
That is starting to make its way into price reductions in ag retail chem prices that farmers are paying now as they look to purchase inputs for 23. On the interest rate side, I don't think we're gonna see a back down in interest rates in 2023.
Indeed, at the Fed's meeting next week, we'll likely see another round of interest rate hikes. Although the hikes should be much smaller than past hikes because we are starting to see consumer inflation drive lower.
We are starting to see some slowdown in the US economy. So overall I think farm costs will be a little moderate from last year, but still very inflated compared to values that they were paying in 2021’s growing season.
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