Peanuts and Cotton Feel the Squeeze
There’s some better news in the latest crop numbers, but for Southeast growers, two important crops are moving the wrong direction.
September’s WASDE improved projected per-acre revenue for crops including corn and soybeans. But compared with May estimates, projected revenue is down for both peanuts and cotton.
And that’s only half of the equation.
American Farm Bureau analysis says fertilizer and diesel costs have surged since the Strait of Hormuz closure in early March. Diesel prices are up about 45 percent since spring, while fertilizer expenses are projected at a record $40 billion this year.
For cotton, Farm Bureau estimates higher fertilizer and diesel costs are adding nearly $30 per acre compared with pre-Hormuz projections.
So for Southeast growers, particularly those raising cotton and peanuts, it’s a squeeze from both sides: lower projected revenue and higher costs to produce the crop.
Farm Bureau’s analysis finds no major row crop is projected to cover total costs for this crop year, marking four consecutive years of returns below total costs.
For more, visit https://www.fb.org/intel/markets/hormuz-price-shocks-outpace-higher-crop-prices
