The rising inflation rates hit the agricultural industry hard. Mike Straumietis, the CEO and founder of Advanced Nutrients, shares that the cost of food produce, crude oil, farming vehicles, and fertilizers spiked to an all-time high during the past years. Growing crops now costs more than ever.
Agricultural companies have the resources to accommodate costly goods production, plus they can compensate for losses by adjusting their prices. However, local farmers don’t have the same luxury. Most of them live paycheck to paycheck; you can’t expect them to ride out economic turbulence—much less remain profitable.
Let’s look at a list of some of the steepest, yet most crucial, farming expenses faced by farmers today:
Crude Oil
The cost of crude oil has nearly doubled since the pandemic. Global travel restrictions limited exports, and sanctions against Russia—one of the largest oil suppliers—crippled oil supplies worldwide. Various sectors are fighting over a very limited resource.
Fertilizer
Lack of mineral imports has caused fertilizer prices in the U.S. to grow by over 30%. Mike Straumietis shares that we still import growing fertilizer minerals such as potash and phosphate. The growing prices have been difficult for farmers who already operate on tight margins. While the price of these minerals has gone up, the demand for them has not changed, meaning farmers are feeling the pinch.
Farming Vehicles
The rising cost of fuel and machinery is a significant challenge for farmers. Since 2020, the automotive industry has been struggling to produce brand-new units, and as a result, prices for second-hand gas and diesel vehicles have increased significantly. Farmers have no choice but to look into these overpriced options, as their business depends on having the proper equipment.
Land
Statistics show that farmland prices have increased by 10% over the past years. Although land has historically retained value, new and inexperienced farmers might not have the adequate resources to invest in extra lots, which ends up limiting their harvesting potential in the long run.
To make matters worse, greedy landlords have been known to exponentially spike their farmer tenants’ monthly rent without just cause. It is important to remember that the real estate bubbles we have seen only temporarily increase property values. It would not be fair for long-time tenants in the countryside to double or triple their current rent rates out of the blue.
Efficient Farm Management During Turbulent Times
Mike Straumietis emphasizes that local farmers from rural areas would do well to overhaul their plant feeding system. Self-sufficiency and sustainability practices have been known to combat rising inflation rates. By Efficiently utilizing low-cost, affordable energy resources, you can produce a bountiful harvest without compromising crop quality.