01/12/09 Farm financial gains offset

Two steps forward and three steps back for farmers&literally. This is David Sparks and I'll be back with details in a minute. None of us are strangers to the recession and we've recently heard from experts that we're entering a dangerous period in which we might see deflation. That's opposite to the trend farmers are seeing in terms of the skyrocketing input inflation. USDA spokesman Earhart elaborates. "The expenses are up about 40 billion dollars just in the last year&and if you go back several years, we've seen cost for fertilizer increase from 9.6 billion in 2002 to almost 28 billion in 2008." So in just 6 years, the ag community has seen inflation of almost 300%. And, according to Earhart, escalation in the cost of fuel was just as dramatic. "Fuel went from 6.6 billion to almost 17 billion. So the rise in expenses has been quite tremendous." But statistics also show that farmers have been receiving better prices for their crops. Has the income side kept up with expenses? Not according to Earhart. (Earhart) "On the income side or the receipt side, most commodities are not keeping pace with the rising costs. The exceptions are corn, soybeans, wheat and the major gains. Livestock, cotton, specialty crops like vegetables and fruits, we expect their receipts to increase in 2008 but not at the same rate that expenses are increasing."