Rising Input Costs and Farmers' Responses

Low commodity prices have prompted farmers to be ever more cognizant of their costs.  I've run across a couple interesting articles of late that touch on this issue.  The first is a piece by David Widmar, who discusses the rising cost of seed for farmers.  He writes the following about corn seed prices and provides the associated figure:

Since 2002 seed expense has increased rapidly. From 2006 to 2014 alone, the seed expense nearly doubled in real dollars; increasing from $51 per acre in 2006 to $101 per acre in 2014 (in nominal dollars, the increase was from $44 to $101).

He concludes:

this environment seems ripe for a seed manufacture to cut prices as a strategy for gaining market share.

While farmers are waiting on incumbent firms to cut prices or for new low-cost entrants, they can act too.  This article in the Wall Street Journal discusses how some farmers are turning to online outlets to source lower priced inputs such as fertilizers and herbicides.  Here's one excerpt:

Online sellers, including some wholesale distributors and national farm retailers, often offer generic versions of popular pesticides that are cheaper than the branded counterparts frequently sold by co-ops. FBN says it also can offer products at a discount because it lacks expenses associated with brick-and-mortar facilities and is able to get better deals from manufacturers because of its national scale.

“It’s infuriating knowing how deeply we’ve been gouged,” said Nebraskan farmer Clay Govier, who said he saved more than $12,000 on herbicides for his 3,000-acre corn and soybean farm by checking prices on FBN’s network.