2022 Cost of Production Increases, Expected Profit and Navigating a Riskier Financial Environment
Input prices for the 2022 crop year are poised to be substantially higher than recently experienced. The increases in input prices will undoubtedly increase production costs, however, the actual financial effect on your farm is not entirely clear. The lack of clarity can negatively influence input use decision-making in this period of high input prices. To clear up the picture, you must run the numbers through production budgets. Developing cost of production budgets can help keep your planning organized and focused and assist with key information in making management decisions on your cropping practices, input usage and risk management as you go forward. We also link the current input cost level with fall 2022 commodity prices, allowing us to inspect profit potential. In this Center for Agricultural Profitability article, UNL professionals discuss the 2022 cropping year by examining increases in input prices, expected profit and risk management.