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Soybeans are transferred into a terminal before being loaded onto a barge for transport to New Orleans, where they will be shipped overseas. Photo by Lance Cheung/U.S. Department of Agriculture
After “tremendous” rises in costs for chemicals, fertilizer and fuel over the past two years, LSU AgCenter economist Michael Deliberto expects to see a slowdown in the rate of increase for inputs in 2023.
However, profit margins will be tight as market prices are not expected to be as high as last year.
“Margins are going to continue to be stressed in 2023 simply because as quickly as commodity prices fall, input prices are slow to fall,” Deliberto said.
Because almost every decision matters to a farmer’s bottom line, Deliberto has worked to create free budgeting and economic tools to assist Louisiana producers in planning their crops.
These tools, which are customizable spreadsheets available at LSUAgCenter.com, help producers develop custom estimates using various scenarios for prices and yields. The spreadsheets allow farmers to compare the cost of production with other years and track their historical production costs. Grants from the Louisiana Soybean and Grain Promotion Board have helped fund these tools.
“By allowing our tools to be distributed in a spreadsheet form, it provides the growers the opportunity to really look at site-specific factors,” Deliberto said.
The tools also help producers estimate how changes — such as buying or renting tracts of land, hiring labor, irrigating more or using a more robust herbicide regimen — will affect their profits.
“We try to get as specific as we can while working within the limitation that every situation is different,” Deliberto said. “We’re providing tools to the growers that they can use to tailor these things to be more reflective of their particular production situation.”
Another aspect of Deliberto’s work funded by the Louisiana Soybean and Grain Promotion Board is providing tutorials to growers about new crop protection offerings.
As the federal Farm Bill has emphasized crop protection as a risk management tool, Deliberto said, the U.S. Department of Agriculture has developed new crop insurance products designed to work with traditional revenue or yield protection policies. He also provides Farm Bill support program analyses for the USDA Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs.
“There are a lot of ‘what if’ analyses, a lot of scenarios,” he said. “This allows us to illustrate the effectiveness of these risk management tools but also defines the types of risks that they’re designed to mitigate, whether that is price or yield risk.”
To help keep producers apprised of important economic news, Deliberto produces monthly market reports and quarterly policy reports. Both are available at LSUAgCenter.com.
Soybean budgeting tools are available at https://www.lsuagcenter.com/topics/crops/soybeans/budgets. Corn budgeting tools are available at https://www.lsuagcenter.com/topics/crops/corn/budget. Kyle Peveto
