Agronomic crop farmers are feeling a financial squeeze as increases in farm input costs have outpaced prices received. The USDA’s indexes of prices paid and received by crop farms in the United States were set to 100 in 2011. Over the past five years, the index of prices paid has been higher than the index of prices received, and that gap has widened since 2023 (Figure 1).
Average prices received by Florida producers of peanut, corn, and cotton increased from 2020 to 2022. Corn and cotton prices have fallen substantially since 2022, and 2025 price projections remain low. Peanut prices have remained fairly steady since 2022, but are projected to decline in 2025 (Figure 2).
According to the Federal Reserve Bank of Kansas City, farmer demand for loans has increased along with rising costs and falling liquidity. Interest rates on farm loans were relatively low until 2021, but have increased 44% since then (Figure 3). Higher interest rates increase the cost of borrowing to cover operating expenses or equipment purchases.
Average wage rates paid by U.S. farmers have increased 71% since 2011 and 24% since 2020 (Figure 3). Rising wages benefit farm workers, but make it more costly to produce labor-intensive crops.
Since 2011, the index of farm machinery costs for U.S. farmers has increased 71%, supplies and repairs 46%, chemicals 17%, and fertilizers 6%. The index of current fuel prices paid by U.S. farmers is down 12% from 2011. Since 2020, fertilizer cost is up 63%, machinery cost 38%, fuels 38%, supplies & repairs 27%, and chemicals 22% (Figure 4).
Although fertilizer prices declined from 2022 to 2024, prices have been rising in early 2025. The table below shows the percent increase in fertilizer prices quoted by north Florida suppliers between November 2024 and May 2025. UAN with sulfur (28-0-0-5) increased 30%. Ammonium sulfate (21-0-0-24) increased 28%. Smokestack gypsum increased 8%, and muriate of potash increased 5%.
Large increases in both farm machinery costs and labor wage rates over the past 15 years have increased crop production costs. Investments in newer or larger machinery can reduce labor needs, however rising machinery costs and interest rates make investments in new machinery less financially feasible.
During times when input costs (such as chemicals, fertilizers, and fuel) are high and farm crop prices are low, it is especially important to consider the cost-effectiveness of crop management decisions. The general rule is that an input application is only economical if the harvest yield gain from the application is greater than the ratio of input application cost to crop price. Input applications that pay off in a low-input-cost and high-crop-price context may not be financially beneficial in a high-input-cost and low-crop-price context. In the current context, it is critical that farmers carefully consider the chances that the value of yield gains from additional input applications will outweigh the additional costs incurred.
The current situation of rising input costs and falling crop prices is creating financial stress for crop farmers. Shockley and Klose (2025) identify five areas of focus to help farmers manage through tough times:
- Financial resilience
- Cost control and efficiency
- Risk management strategies
- Market adaptation and diversification
- Mental health and well-being.
Various types of assistance are available. UF/IFAS Extension can provide information to assist with crop management decisions, as well as financial and risk management. The Florida Farm Bureau has a webpage listing mental health resources. The USDA Farm Service Agency administers recurring and one-time federal financial assistance programs, such as the Emergency Commodity Assistance Program and the Supplemental Disaster Relief Program.
Authors: Kevin Athearn and Amanda Phillips, University of Florida, IFAS Extension.
Acknowledgments: The authors would like to thank the local suppliers who provided price quotes on various ag inputs.
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