01/03/08 Commodity prices up, so are input costs

Record high commodity prices but input costs are soaring too. That's the gist of the US Department of Agriculture's analysis for December. The price index for all farm products was up 26 percent in December from the same month a year ago. December wheat average, $9.41 per bushel, up two dollars from November, and $4.89 above last year. Corn $3.88 a bushel, 87 cents more than a year ago. Livestock, everything selling for more except for hogs. USDA economist Keith Collins says a basic economic rule comes into play here. COLLINS "The demand, both in the United States and around the world is generally outstripping the supply of agricultural products." But what does all of this mean for 2008? COLLINS "We're looking for another very strong price year." But American farmers will spend 22 billion dollars more this year than last year to produce their crops. Collins says fuel and fertilizer costs get most of the blame. COLLINS "Fertilizer is facing many new buyers in the world market and we're facing the low value of the dollar which is increasing our fertilizer costs now that more than 50 percent of nitrogen is imported." And he doesn't see those input costs coming down in '08. Voice of Idaho Agriculture Bill Scott