Major Decline in Farm Expenditures

After approaching record highs in 2008, farm expenditures have significantly declined, the first major drop since the 1980s. Nationwide, expenditures decreased $20 billion, or 6.2% per farm. The biggest cause of this decline was the drop in petroleum costs in 2009, which led to a decreased cost for fuel, fertilizers, and agricultural chemical production.

Farmers and ranchers spent $12 billion on fuel costs in 2009. This number is down over 20% from 2008 highs. Average farm fuel expenditures have dropped from $7,300 in 2008, to $5,658 in 2009. In addition to fuel costs, feed costs have decreased 4%, farm service costs have decreased 4.2%, and fertilizer costs have decreased 10%.

Despite these overall savings, some farmers are still feeling a major pinch and many claim that news costs are outweighing fuel savings. Taxes in particular are blamed for many farm declines. “Taxes and energy are the one-two punch that are putting them out of business,” said Patrick Manning, a New York farmer. “My feed prices — I’ve seen them stabilize and certainly gas prices have gone down somewhat but that has been offset by all the taxes New York state has placed on us.” Ron Khosla, a New Paltz farmer said, “Prices aren’t down. I think net profits are the same. … I don’t feel like we are doing better or worse.”

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