Higher diesel prices are creating added financial pressure for farmers as planting season gets underway.
Many operations entered the spring with fuel purchased over the winter for less than $3 per gallon. However, the first refill of the season could cost more than $1.50 higher per gallon.
The increase comes as fertilizer costs are also on the rise. Despite that, a University of Missouri Extension analyst says the overall impact may be less severe than some expect.
Senior research analyst Drew Kientzy says a typical corn operation using about 7.5 gallons of fuel per acre would see fuel costs increase by about $11 per acre compared to fall estimates. That would bring total fuel costs to roughly $33 per acre.
Machinery operating costs are also climbing, now estimated at more than $94 per acre, up from about $83 last fall.
Even so, fuel represents only a portion of total expenses. Kientzy says it accounts for about 18% of machinery costs and around 5% of total production costs. With higher diesel prices alone, net returns to land could drop from about $120 per acre to approximately $108.
Extension specialists encourage farmers to closely track input costs and use budgeting tools to monitor break-even points as market conditions continue to change.
More information is available through University of Missouri Extension crop budget resources online.
